EMC Executive Vice President and CFO David Goulden Discusses EMC’s First-Quarter 2011 Financial Results
EMC announced first-quarter 2011 financial results on April 20, 2011. EMC’s Executive Vice President and CFO David Goulden, discusses the results below. Additional information regarding EMC’s financial results is available here.
April 20, 2011
An excellent quarter and great start to the year. What should we take away from it?
David Goulden: EMC started off the year with solid results. We successfully executed on our financial triple play once again: gaining market share, investing in the future, and improving profitability. We fully expect to continue realizing this triple play over the long term for two reasons. One, we are in the early stages of the largest IT transformation in history, which is creating enormous opportunities in cloud computing and Big Data. And two, we have positioned ourselves to take full advantage of this opportunity by focusing on the transformation of IT infrastructure and applications.
Cloud computing and Big Data warehousing and analytics are revolutionizing IT. How is EMC positioned to help customers capitalize on these trends?
David Goulden: We are squarely focused on helping our customers take advantage of the rapidly emerging opportunities offered by both cloud computing and Big Data. It is this focus that drives us to continually identify and execute on opportunities that increase our value proposition to customers in this new world. As customers’ IT needs grow larger and more complex, and as more and more of a company’s success is linked to its IT, we have innovated and invested to come out in front of these needs. There is no other company in IT with the combination of market-leading virtualization and infrastructure assets that EMC has today for getting to cloud computing and for unlocking the value contained within Big Data that surrounds us. Our virtualization and infrastructure assets are critically important for getting companies where they want to be. This is why EMC is a vendor of choice for organizations of just about every size and every vertical, and this is a key reason why our opportunity is so vast.
How are you going to market?
David Goulden: In many different ways. We are working directly with our customers to move them to cloud infrastructures and address their Big Data needs on their terms and timelines. We are investing in and expanding our channels to equip them to become invaluable partners to their customers who are looking to gain greater efficiencies from IT. We are working with dozens of service providers who want to deliver the efficiencies of IT at scale to their customers and use best-of-breed technology to do so. And we are meeting the rapidly expanding demand for converged IT infrastructures through our VCE joint venture. In short, we are developing solutions and expanding our go-to-market in ways that make it easy for customers to take part in cloud computing and unlock the value of Big Data. There is vast growth potential in the areas where we compete, and we are aggressively pursuing these opportunities at multiple levels.
How is EMC’s new VNX unified storage family doing?
David Goulden: It is being very well received by the market. Our VNX unified storage product started shipping the last week in February 2011 and was off to a strong start in March. VNX represented over 50 percent of the traditional mid-tier orders we booked in the last two weeks of the first quarter, and we expect VNX revenue to continue to ramp over the course of this year. It has a long list of advantages against competitors, advantages that customers in this space really respond to. First, it is simple. The market-leading capabilities of our file and block solutions are now combined into a single, unified platform that is managed through a centralized and simple EMC Unisphere interface. Also, it is efficient. It is the only storage system that automates both file and block sub-LUN tiering with FAST VP. The combination of this with compression and file deduplication enables customers to significantly improve capacity efficiency. It was great to see that almost 50 percent of VNX systems went out in the first-quarter with flash capacity which indicates customers are taking advantage of tiering. Finally, it is powerful. By leveraging x86-based multi-core processor technology to maximize solution throughput and bandwidth, the VNX set a world-record performance benchmark for networked file performance and overall response times, and VNX is three times faster than our previous-generation systems.
What about the VNXe system?
David Goulden: The VNXe, which started shipping the second week of March, packages proven EMC quality into an affordable, unified storage system. We designed the VNXe to be easy to manage, easy to sell and easy to support, with the features and functionality you would expect from an EMC product at a price you may not. The VNXe offers capabilities like advanced data reduction technology, automated technical support, and efficient provisioning for mailboxes or VMware data stores, at an entry level price that firmly establishes it as the best value in the market. Remember that this is a new product in a new space being sold to new customers through new channel partners, so it is going to take some time before we see a material benefit to our growth. However, we are pleased to report the VNXe is off to a strong start. We are rapidly on-boarding hundreds of new partners to sell the VNXe, and have created fresh momentum with existing channels. In fact, with VNXe launch events in dozens of cities across the globe, we signed on more new partners in the first quarter of this year than we signed on over the course of all of last year, and the progress continues.
Any insight into the rest of 2011?
David Goulden: We executed well against our strategy in the first quarter and we believe the outlook for the rest of 2011 and beyond is bright. The major trends in cloud and Big Data are large and growing, our strategy is in place and we will continue to execute very well.
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, VNX and VNXe are either registered trademarks or trademarks of EMC Corporation 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) the relative and varying rates of product price and component cost declines and the volume and mixture of product and services revenues; (iv) competitive factors, including but not limited to pricing pressures and new product introductions; (v) component and product quality and availability; (vi) fluctuations in VMware, Inc.’s operating results and risks associated with trading of VMware stock; (vii) the transition to new products, the uncertainty of customer acceptance of new product offerings and rapid technological and market change; (viii) 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; (ix) the ability to attract and retain highly qualified employees; (x) insufficient, excess or obsolete inventory; (xi) fluctuating currency exchange rates; (xii) threats and other disruptions to our secure data centers or networks; (xiii) our ability to protect our proprietary technology; (xiv) war or acts of terrorism; and (xv) 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.