EMC comes down to Earth

With an admission that the EMC Corp. of old was something of a one-trick pony for high-end storage, company officials on Thursday said to expect a wider reach into the middle and lower-end storage markets.

“EMC’s traditional strategy has been one-size-fits-all,” said David Donatelli, executive vice president for EMC’s storage platform operation, speaking at an analyst meeting here Thursday.

Thus, going forward Hopkinton, Mass.-based EMC plans to take its expertise in high-end enterprise storage and migrate the technology down into a range of new storage hardware and software expected to arrive over the next nine months, according to EMC president and CEO Joe Tucci.

Based on commodity-grade Intel chips and built, initially, by EMC channel partner Dell Computer Corp., the new EMC storage products for midsized and small companies will mark a significant change in the tradition EMC way of designing storage.

Future EMC storage systems for small businesses will be “integrated storage appliances” that run Microsoft’s Windows operating system, traffic both block and file data, and contain mixed technologies to deliver the functionality of a SAN (storage area network) device, a NAS (network attached storage) device, and a backup device, said Donatelli.

EMC’s products for the midrange market will offer “centralized intelligent capacity” in a modular storage architecture that allows customers to add or subtract multiple storage functionality, said Donatelli.

Commonality across the management software of the new EMC storage systems is also a goal for EMC across its entire line of storage hardware products, he said.

Not forgetting that EMC is also mid-stream in a colossal ramp up in enterprise storage management software, upgrades to EMC’s AutoIS storage management initiative were also announced Thursday. Erez Ofer, executive vice president of EMC’s open software operations, said to expect policy-based storage provisioning in the next version of EMC’s ECC (EMC Control Center) software. He also said EMC should deliver improved virtualization tools by way of enhanced data migration and data presentation in the next three to four quarters.

To more quickly ramp EMC’s software efforts across the board, Tucci did not rule out near-future acquisitions of third-party software companies, but he would not elaborate.

While Dell will be the first to build the new mid- and lower-tier EMC storage boxes-co-branding them EMC/Dell-Tucci said other vendors capable of following EMC’s technology blueprint for the products are welcome to build and resell them on a licensed basis.

By allowing industry standard hardware vendors, such as Dell, to OEM EMC storage products for small and midsize business, EMC keeps itself at arm’s length from the falling hardware margins of that industry sector, said Tucci.

Going forward, EMC hopes to better control costs by merging its component purchasing channel with that of Dell, giving both EMC and Dell the freedom to look for better deals when it comes to buying things like disk drives.

“We are going to merge ours and Dell’s supply chain, so we’re both out there looking for the best deal,” said Tucci.

EMC will also save money by reducing its portfolio of disk drive options from ten down to three. Power supply options will fall from seven down to three. And a common HBA for Symmetrix and Clariion systems should also bear added savings, said Donatelli.

With all of the changes announced Thursday, EMC believes it will successfully shed a perception that the company cares little for customers not able to pay a premium for the highest-end storage, a perception EMC created for itself, said Tucci.

“I think [customers] got mad at us, truthfully,” said Tucci, who added that the new EMC attitude is one of “a confidence, not an arrogance.”

As for the competition, Tucci down played any threat from Hitachi Data Systems Corp., which re-sells through both Hewlett-Packard Co. and Sun Microsystems Inc. “HP and Sun are using Hitachi as a defence mechanism against us,” Tucci said. IBM, he said, was a closed, “blue-on-blue” storage player.

Laura Conigliaro, an analyst with The Goldman Sachs Group Inc. in New York, said EMC will likely get the benefit of customer patience as it transitions into wider markets and delivers improved products, size, and an IBM-like reputation for being utterly reliable are both on EMC’s side, she said.

“Customers may not like it, but they understand that issues like AutoIS are complicated,” said Conigliaro.

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