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EMC President and Chief Operating Officer David Goulden Discusses EMC’s First-Quarter 2013 Financial Results

EMC announced first quarter 2013 financial results on April 24, 2013. EMC’s President and COO David Goulden, discusses the results below. Additional information regarding EMC’s financial results is available here.

Image: David Goulden - EMC President and COO
David Goulden - EMC President and COO

April 24, 2013

A solid first-quarter. What should we take away from EMC’s financial results?

David Goulden: This morning we reported a solid start to 2013. While customer caution continued in the first quarter of this year, we executed well on our mission to capture the opportunities presented by cloud computing, Big Data and trusted IT. We firmly believe, and our results attest, that our strategy is the right one.

What is driving customers’ interest in cloud computing?

David Goulden: As demands on IT have intensified with the rise of trends toward mobile, social and Big Data, customers are finding greater efficiency, agility and choice from cloud computing infrastructures. Whether private, public or hybrid, clouds turn IT into a service that can be utilized on demand. This vision has guided our strategy since 2009, and we have continued to hone our broad, best-of-breed portfolio to enable IT-as-a-Service, both on-premise and off. Adhering to this vision while also continuing to address customers’ broadly varied needs as they transition to next-generation infrastructures has enabled us to continue to gain market share.

How does EMC’s strategy align with the company’s three federated businesses: EMC Information Infrastructure, VMware and Pivotal?

David Goulden: Today’s dynamic environment requires IT to be able to respond to constant change, which is why flexibility and choice are such high priorities for customers. Businesses require IT resources that scale on demand, can handle a variety of workloads and can be trusted at all times. Choice is a key value proposition of what EMC offers. The federated structure we introduced last month at EMC’s and VMware’s Strategic Forum for Institutional Investors is instrumental to this.

At the information infrastructure layer, EMC’s information storage, information protection, information security and information intelligence businesses are built to facilitate the agility, efficiency and choice that make cloud computing so appealing. Leading technology developed with a horizontal, open approach ensures choice into the future. Our best-of-breed product strategy, tight integration with VMware and support for Microsoft and OpenStack give customers choice. At the virtual infrastructure layer, VMware continues to lead the market. With a vision to radically simplify IT by expanding capabilities beyond server virtualization to software-defined data center, hybrid cloud and end-user experience, VMware’s commitment to enabling choice is unparalleled. At the application layer, Pivotal has the foundation and leadership in place to offer best-in-class options for new application development leveraging Big and Fast Data, so customers can leverage a next-generation platform to develop and deploy new apps without having to choose or commit to any one specific infrastructure.

This innovative framework leaves each business free to focus on its own mission while leveraging the advantages of one common strategic vision and creating the greatest opportunity for customer choice.

How do you see customers’ information storage priorities evolving?

David Goulden: Information growth continues but the nature of it is changing: different types of data grow at different rates, with large-scale file and object-based data sets growing faster than traditional transactional data sets. The types of workloads that leverage this data are even more varied. Some workloads need very high performance, others need high capacity. Certain workloads need very high service levels and others need very little. What this means is different storage is needed for different workloads. From a deployment perspective, some of these workloads work well in public clouds and some are better off in private clouds.

EMC offers storage infrastructure for this broad variety of workloads – for both private clouds and public clouds alike. Both private clouds and public clouds represent growth opportunities for us. We continue to expect more business workloads to run in private clouds than in public clouds in 2016 – and therefore represent the larger opportunity. A recent report estimated that IT spending on private cloud will grow at a 58% annual rate from 2012 to 2016. However, supporting business workloads running in public clouds is also a very fast-growing opportunity, and the service provider vertical continues to be the fastest-growing vertical for our storage business.

How is EMC helping customers leverage the benefits of flash technology with the new Xtrem Flash family?

David Goulden: Our Xtrem Flash family was formally launched in March 2013. The Xtrem Flash family includes:

  • XtremSF PCIe cards – which accelerate performance on the server, and updated to include MLC as well as SLC
  • XtremSW Suite – which includes our XtremSW Cache software caching product, accelerates application performance and leverages the data services of the storage array to protect the data
  • XtremIO all-flash storage array – which delivers unparalleled performance without sacrificing the rich data services customers value in their storage infrastructures.

Having different flavors of flash allows customers to leverage the latency and throughput advantages, regardless of the workload. With server-side flash, customers love the performance gains flash brings, and they are pleased to see an alternative solution on the market with the addition of our XtremSF DAS solution. The customers participating in the XtremIO directed availability program are very excited about this transformational technology. XtremIO is unmatched in its ability to deliver sub-millisecond response times without compromising rich data-service functionality, including in-line deduplication, thin provisioning, data protection and writeable snaps and being able to scale out on a linear basis.

EMC’s RSA Security business had strong quarter. Can you talk about what’s driving its growth?

David Goulden: Like storage, the right approach to security is also key to successful implementation of cloud computing, and RSA is delivering. By leveraging Big Data to create intelligence-driven security, and integrating capabilities across the portfolio to provide truly contextual solutions, RSA is creating powerful and effective offerings. RSA’s new Security Analytics Suite and Authentication Manager 8.0 are being very well-received by customers after their launch in the first-quarter, as they utilize a Big Data approach to tackle today’s dynamic threat environment. It is this intensifying threat environment that keeps security at the top of the IT priority list for customers, as evidenced by record attendance of about 25,000 at the RSA Conference in February; record registrations for the Archer User Group Conference; and registrations for upcoming security events in Europe and Singapore that have exceeded available capacity – clearly a tremendously positive response on both our strategy and our offerings.

Any insight into EMC’s strategic focus for the remainder of 2013?

David Goulden: As we look to the rest of the year, we will continue to focus on our strengths and take advantage of the many opportunities before us. Our approach, which values efficiency, agility and choice across the three layers of IT – information infrastructure, virtual infrastructure and next-generation applications – is differentiated. In fact, as customers evaluate their investments more carefully in the context of how they will use next-generation IT to their advantage, we think our vision incorporating all three layers is especially relevant. Customers trust EMC to help them take full advantage of the many business benefits offered by cloud computing, Big Data and trusted IT.

About EMC

EMC Corporation is a global leader in enabling businesses and service providers to transform their operations and deliver IT as a service. Fundamental to this transformation is cloud computing. Through innovative products and services, EMC accelerates the journey to cloud computing, helping IT departments to store, manage, protect and analyze their most valuable asset — information — in a more agile, trusted and cost-efficient way. Additional information about EMC can be found at www.EMC.com

EMC, Archer, RSA, XtremSF, XtremSW and XtremIO are either registered trademarks or trademarks of EMC Corporation in the United States and/or other countries. Pivotal is a registered trademark or trademark of GoPivotal, Inc. and 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) 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.

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