EMC’s chief surveys storage and optical landscape

Michael Ruettgers, CEO of Hopkinton, Mass.-based EMC Corp., is on top of the storage world, heading a company that just reported another quarter of stellar financial results and that continues to hold leading shares of key storage market segments. He spoke recently with Network World (U.S.) Senior Editor Deni Connor about where the company and industry are headed.

NW: You’ve been talking recently about the intersection of storage and optical networking. Why is that important?

Ruettgers: Optical networking technology allows us to get data from where we have it to where customers want it so they can manage it more effectively. Optical networks will bring data to a point of presence for distribution outward. As optical networks grow and become faster, people will put more information on them. The more information you have available, the faster your pipes need to be. As the pipes become faster, you’ll download more information from the Internet. It’s very much a vicious circle.

NW: Earlier this year, EMC announced a partnership with Computer Network Technology to bridge storage area networks over IP. Since that time, you’ve partnered with Cisco Systems Inc., Nortel Networks Corp. and Lucent Technologies Inc. to do the same thing using dense wave division multiplexing, an optical technology. What do you think about the alternate proposal for putting SCSI traffic over IP instead of Fibre Channel?

Ruettgers: We’re interested in whatever interconnect helps our customers. We support eight protocols today. We’re placing multiple bets and watching the technology very closely.

NW: If Moore’s Law applies to chip performance, is there an axiom for storage?

Ruettgers: We think our side of the business grows two-and-a-half times as fast as networking and three times as fast as processors.

NW: Where is EMC going to be next year, two years from now and in five years?

Ruettgers: The size of the market for us this year is US$44 billion. The size of the market in 2003 grows to US$78 billion. The market grows to US$100 billion in 2005. Today, customers have the problem that data is exploding. The need for qualified people is going up also, and they are left with figuring out how to manage this gap. We try to provide not only storage systems, but management software.

NW: What are you doing to keep EMC from becoming fat and lazy?

Ruettgers: We are a lot more tied to our customers. If you take a look at the transitions we’ve made during the ’90s, if we had behaved like a traditional company, we would never have moved out of the mainframe business. By spending time with customers, we could sense that they were beginning to centralize all their distributed systems. As soon as they started doing that and bringing that information back into the corporation, they would want the same protection for that information that mainframes required. We moved the company to go after that [open systems market]. Taking a company and moving it from mainframes to open systems wasn’t easy. We didn’t have people that knew much about it. We thought we were making a high-level sales call and would show up to a conference room that had 20 Unix programmers in it where we could only answer the first four questions [they asked].

NW: Why did EMC buy Data General Corp.?

Ruettgers: For the Clariion midrange storage product. Lots of customers were asking us [for midrange products]. We can’t really dumb down Symmetrix and take enough stuff out and make it cost-effective for that market, so we had two choices: we could develop [systems and software] or buy a company from among the leaders on the OEM side.

NW: Much of your sales model depends on the 24-7 monitoring of a customer’s storage. How does that play in the midrange where businesses are less flush with cash?

Ruettgers: The Global 2000 often has midrange requirements. That’s the target market for us, not the small, medium-sized business. Small businesses are moving to application service providers for that kind of service.

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