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EMC Executive Vice President and CFO David Goulden
Discusses EMC’s Fourth-Quarter 2010 Financial Results

EMC announced fourth-quarter 2010 financial results on January 25, 2011. EMC’s Executive Vice President and CFO David Goulden, discusses the results below. Additional information regarding EMC’s financial results is available here.

Image: David Goulden - EMC Executive Vice President and CFO
David Goulden - EMC Executive Vice President and CFO

January 25, 2011

Another excellent quarter. What should we take away from it?

David Goulden: EMC had another great quarter to finish off a year of excellent operational and financial results. Our vision and strategy are on target, the market is primed and ready and we have the right assets to help our customers on their journey to the cloud. As a result, in 2010 we executed on our triple play to simultaneously invest meaningfully in our business, take market share and improve profitability.
Let’s talk about Cloud Computing.

Where are organizations right now on the journey?

David Goulden: While customers are eager to deploy cloud architectures so they can begin capturing the efficiencies cloud computing affords, this is not a transformation that happens overnight but in phases. Phase one includes the virtualization of smaller, departmental, often IT-owned applications, frequently with simple and efficient VM-integrated mid-tier storage. Cost-efficiency is a primary benefit here, and we saw a large number of customers passing through this phase in 2010. On average, customers have virtualized about 30 percent of their applications and are now entering phase two.

Phase two is the virtualization of business-critical applications, ideally with more resilient infrastructure that meets demanding service level agreements (SLAs) for performance, availability, workload mobility, recoverability and security. More and more customers are entering this phase heading into 2011. Well over half of a company’s applications will have been virtualized once it has completely passed though this phase of the journey to the cloud.

Phase three is when a customer is finally leveraging all the power of a fully virtualized environment to provide IT as a service, with automation, provisioning and chargeback, and drawing on compatible public cloud services where it makes sense. The early adopters are only just starting to get here.

And as a customer’s cloud infrastructure develops, it looks to build in technology that will secure and protect its operations whilst achieving better business agility than ever before. This means best-of-breed and well-integrated capabilities for things like security and backup.

Such transitions to the cloud are becoming the norm, and the vast majority of customers are at some point in their transformation to IT as a service. What is important is that whether customers are just entering the first phase or well into the third, EMC has the product portfolio and the services expertise to accompany them every step of the way.

What about “Big Data? What’s driving this major trend in IT?

David Goulden: In addition to Cloud Computing, “Big Data” – which is a primary contributor to the staggering pace of data growth – will drive our results in 2011. When we talk about “Big Data,” we are referring to the enormous repositories of corporate and external data including unstructured information created by social media and other web repositories. We are also talking about the associated analytics that unlock the value contained within these massive amounts of data. “Big Data” differs from the transactional and small-file data and applications that have traditionally characterized a company’s data center. It tends to be more sequential, less transactional and much bigger, measured in petabytes rather than terabytes. The tools and platforms surrounding “Big Data” require new approaches and capabilities to handle these data sets. With the investments we have made through the acquisitions of Isilon and Greenplum, as well as in our own EMC Atmos offering, we are now squarely positioned to capture much of this large and growing incremental market opportunity.

Last year, EMC acquired business analytics pioneer Greenplum and “scale-out” networked attached storage leader Isilon. How are they doing?

David Goulden: Great! Greenplum did very well in fourth quarter and we are especially pleased with the fast ramp of the EMC Greenplum Data Computing Appliance. The new system combines leading innovations in workload management, fault tolerance and advanced analytics with the fastest-data loading on the market today, which is important given the vast amount of source data needed to run analytics. Customers value all this plus the fact that they can get the new system up and running very quickly.

Isilon’s momentum continued with record revenue in fourth quarter, on a stand-alone basis, well above the company’s expectations prior to its acquisition in late December 2010. In its sixth generation, Isilon’s scale-out technology has matured and is mainstream, enterprise-ready and meeting the “Big Data” challenges that characterize today’s IT environment in a growing number of vertical markets. This is great momentum, even before the benefit of the EMC effect.

Any insight into 2011??

David Goulden: There is vast opportunity available to us at the cross-roads of the mega-trends of cloud computing and “Big Data.” EMC is particularly well-positioned to take advantage of this opportunity with: a refreshed product portfolio that meets customer needs for efficiency and simplicity, a services organization that is one of the most trusted in the industry, one of the most advanced and capable go-to-market organizations in the industry, a strong and growing partner ecosystem, and our expanding role as a trusted cloud technology provider across the globe. This alignment of IT trends with our capabilities gives us a high level of confidence and strong momentum as we look ahead.

About EMC

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, Greenplum, RSA, Symmetrix V-Max 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.

Forward-Looking Statements

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.

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