EMC Executive Vice President and CFO David Goulden
Discusses EMC’s Second-Quarter 2010 Financial Results
EMC announced second-quarter 2010 financial results on July 21, 2010. EMC Executive Vice President and CFO David Goulden, discusses the results below. Additional information regarding EMC’s financial results is available here.
July 21, 2010
What should we take away from the quarter?
David Goulden: EMC had another good quarter due to strong demand for our market leading solutions, our solid business model, and great execution by the team. Once again we achieved our triple play – we gained market share, invested for the future, and improved profitability. We see no reason why we cannot continue to maintain this triple play over the long term. Today, our strategy is clear, the business model and operating model are in place, our investments continue to pay off, and the private cloud opportunity is very big. EMC has never been better positioned for success than it is right now and, as a result, we believe we can continue to deliver double-digit revenue and double-digit earnings growth for the next several years.
How is the new VPLEX virtual storage system doing?
David Goulden: Our VPLEX platform is a net new opportunity and is proving to be a unique differentiator that is resonating with customers. Its technology is very complementary to tiered storage, as the combination of tiering with the mobility from VPLEX creates entirely new usage models that are an ideal virtual storage infrastructure for the private cloud. As with server virtualization, where applications are consolidated onto one server and then can be mobilized over many servers, virtual storage creates an elastic pool of storage within which you can tier data – and with VPLEX – move data across arrays within and between data centers.
Can you comment on EMC’s opportunity in the mid-tier?
David Goulden: Sure. Our technology lead extends to our mid-tier storage offerings. The many use cases and multiple technologies available in the mid-tier have driven customers to demand ease of use and simplicity as well as the right technology for the right job. The strength and breadth of EMC’s technology portfolio helps us satisfy these customer requirements better than anyone else. What really sets our mid-tier solutions apart is our technology edge coupled with simplicity and efficiency and, this is driving our growth across the mid-tier. EMC is already the acknowledged leader in the traditional mid-tier SAN and NAS environments. We are leading in some of the most important new technologies such as deduplication, unified storage, and virtualization affinity, and we continue to add major next-generation software functions that further extend our technological lead. When you put it all together, EMC is the only company in this position across the mid-tier. Our competitive edge continues to grow and, as a result, it is pretty clear that we should be able to continue to gain share in the mid-tier market.
This month marks the one year Data Domain acquisition anniversary. How is the Backup Recovery Systems Division (BRS) progressing?
David Goulden: Our Backup Recovery Systems business had another stellar quarter. This division is performing very well, and the acquisition of Data Domain has already shown itself to be one of our best ever. When we acquired Data Domain a year ago we had a pretty good idea of the power that could be unleashed by combining their deduplication technology with EMC Avamar and our extensive customer reach. In the second quarter, revenue from Avamar and Data Domain continued to grow from the billion dollar revenue run rate we reported in the first quarter of 2010. There is great demand for this simple and efficient next-generation backup technology because it addresses one of the biggest pain points in the data center. We acquired over 350 new Data Domain customers in the second quarter alone, and more than 200 new Avamar customers.
Virtualization is revolutionizing IT. How is EMC aligned to help customers on the journey to fully virtualized IT environments?
David Goulden: EMC is optimized for virtualized environments in ways that make a noticeable difference to customers. Much of this preference is due to the efforts we have made to have the best integration with VMware virtual environments. For example, EMC is the only storage vendor to fully support the four VMware storage APIs for vCenter Site Recovery Manager, Data Protection, Multipathing and, the just-introduced Array Integration API. EMC puts more effort and resources into this tight integration and customers can tell the difference. Today we have far and away the largest installed base in VMware environments and, according to a spending intentions survey recently conducted by a major independent analyst firm, VMware customers are more than twice as likely to choose EMC for storage than any other vendor.
Which brings us to the journey to cloud computing. Can you discuss EMC’s and the Virtual Computing Environment (VCE) coalition’s opportunity for this major shift in IT?
David Goulden: Our VCE coalition is addressing its mission to accelerate the proliferation of cloud infrastructures. Customers are eager to start realizing the benefits of reduced cost and improved business agility. They are looking to VCE as a means to get there because it provides a way to significantly reduce risk, cost, and time-to-value with ready-to-deploy cloud infrastructures. A recent survey by Datamonitor and UBS indicates that the VCE coalition is far and away the preferred solution for data center modernization.
Our consulting services business also continues to thrive by guiding customers’ transitions to virtual data center architectures, as EMC is a trusted advisor within the enterprise that enables customers to move forward with confidence. As the only player offering virtual server and virtual storage infrastructures, coupled with advanced IT security and compliance and information intelligence, EMC is squarely focused on helping customers make this transition to next-generation private and public clouds.
EMC Corporation (NYSE: EMC) is the world’s leading developer and provider of information infrastructure technology and solutions that enable organizations of all sizes to transform the way they compete and create value from their information. Information about EMC’s products and services can be found at www.EMC.com
EMC, Avamar, Data Domain, and VPLEX are either registered trademarks or trademarks of EMC Corporation in the United States and/or other countries. VMware is a registered trademark or trademark of VMware, Inc. in the United States and/or other countries. All other trademarks used are the property of their respective owners.
This document contains “forward-looking statements” as defined under the Federal Securities Laws. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in information technology spending; (iii) our ability to protect our proprietary technology; (iv) risks associated with managing the growth of our business, including risks associated with acquisitions and investments and the challenges and costs of integration, restructuring and achieving anticipated synergies; (v) fluctuations in VMware, Inc.’s operating results and risks associated with trading of VMware stock; (vi) competitive factors, including but not limited to pricing pressures and new product introductions; (vii) the relative and varying rates of product price and component cost declines and the volume and mixture of product and services revenues; (viii) component and product quality and availability; (ix) the transition to new products, the uncertainty of customer acceptance of new product offerings and rapid technological and market change; (x) insufficient, excess or obsolete inventory; (xi) war or acts of terrorism; (xii) the ability to attract and retain highly qualified employees; (xiii) fluctuating currency exchange rates; and (xiv) other one-time events and other important factors disclosed previously and from time to time in EMC’s filings with the U.S. Securities and Exchange Commission. EMC disclaims any obligation to update any such forward-looking statements after the date of this document.