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

EMC announced third quarter 2013 financial results on October 22, 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

October 22, 2013

Describe the benefit of EMC’s federated business model.

David Goulden: As we look across our federation of businesses, we see a number of benefits to our model. First and foremost, this model is best for customers: it offers our customers horizontal solutions and more choice than they get from others to prepare them for the third platform of IT. Second, this approach fosters excellence. It leaves each business free to focus and build the products, go-to-market capabilities, and ecosystems necessary to win. Finally, with all three businesses together within one federation, interests across them are aligned. As part of a single entity, our businesses share a vision to leverage cloud, big data, and trusted IT to maximize control, efficiency and choice.

How is the new EMC VNX series doing?

David Goulden: The press, industry analysts and most importantly our customers and partners received the new VNX with enthusiasm. This was evidenced by their rapid transition to the new systems, where almost 35% of the new VNX orders in September were for the next-generation VNX. By the last week of the quarter, this mix had reached about 50%. This rapid uptake is not surprising, as the new VNX represents a breakthrough in Unified Storage, delivering over four times the performance of its predecessor across file, database and virtualization workloads. Key to this breakthrough is the new MCx software, which enables the VNX controller to take full advantage of Intel multi-core processing power. By uniformly distributing data services across all cores, customers avoid the controller bottlenecks that can hamper the performance of other mid-tier systems. This is especially important for maximizing the potential of flash in the array. The new VNX is optimized for flash, which is clearly important, as approximately two-thirds of the next-gen VNXs sold in the quarter included flash drives. This is a significantly higher rate than the previous VNX family.

Help me understand EMC’s position in Flash.

David Goulden: Our storage business continues to benefit from our differentiated strategy leveraging flash technology across the entire storage infrastructure. Flash has a significant role to play in our hybrid storage arrays, which we are increasingly optimizing to take advantage of flash. For many workloads, hybrid arrays offer rich data services, low latencies and the most economic price point. Our recently announced next-generation VNX is an outstanding example of this.

However, some workloads require sustained low latencies regardless of whether the array is idle, busy, empty or full. This is the domain of all-flash arrays and the reason why last year we acquired XtremIO. XtremIO is architected in a fundamentally different way than both hybrid arrays and any other All-Flash Array. These differences include true multi-controller, scale out, architecture delivering consistent and predictable performance for any workload, with any level of array utilization, over any period of time; de-duplication that is always on and always inline; metadata that is always stored in memory to minimize writes and allow near-instantaneous cloning of virtual machines; flash-optimized data protection which is both faster and dramatically more efficient than traditional RAID.

I want to be clear that XtremIO is the only all-flash array architected with all these in mind, and this represents a key advantage for EMC and our customers. XtremIO will GA this quarter and we are confident it will be very successful.

How are your customers using software-defined-storage and EMC ViPR?

David Goulden: We are excited about EMC ViPR, which GA’d last month. ViPR delivers software-defined storage and consists of two distinct components: the ViPR Controller and the ViPR Data Services. The ViPR Controller reduces complexity in today’s storage environment by abstracting and standardizing the management of EMC and non-EMC arrays. Because of this, the storage infrastructure can be highly automated and accessed through a self-service portal – enabling IT departments to offer a simple, public cloud-like experience for application owners.

ViPR Data Services provide new storage functionality, in software, on top of existing EMC arrays, non-EMC arrays and, early next year, commodity storage. Initially ViPR provides a new object storage software implementation supporting both EMC Atmos and Amazon S3 interfaces. We believe large web-scale content depots and next-generation application developers will increasingly rely on object storage because of its simplicity, cost and globally distributed nature. Object stores will also play a major role underneath Big Data analytics systems based on Hadoop. For that reason we will be adding HDFS access to ViPR object storage later this year.

EMC and VMware officially launched Pivotal earlier this year, how is it going?

David Goulden: Pivotal, our new company, continued to make significant progress in the third quarter towards its goal of building a new application development platform comprising next-generation data fabrics, application fabrics and a cloud-independent platform-as-a-service. Pivotal’s recent acquisition of Xtreme Labs in October adds an important dimension to this effort, as Xtreme Labs’ advances in mobile app development are highly complementary to the expertise of Pivotal Labs, the agile development services unit within Pivotal. Xtreme Labs’ list of clients is impressive, including several newer web-scale companies as well as organizations like Deutsche Telekom, Viacom and the NFL.

Enterprise customers are seeking a data-centric and modern development platform on which to build their next-generation applications, for both web and mobile. Pivotal’s first version of this platform, Pivotal One, is on track for availability before year end. Pivotal’s leading efforts in the space are capturing the interest of many. Their inaugural Cloud Foundry Conference last month was sold out and attracted five times the number of attendees it had targeted. Additionally, large, household-name organizations including GE and IBM are lining up to collaborate or co-innovate on the open-source Cloud Foundry project.

Any insight into what’s ahead for EMC?

David Goulden: We are confident that we will continue to grow and gain share because we have the right vision and strategy, an enviable market position and portfolio, a leadership role in important new technologies and, across the federation, the team to make it happen. All of this together puts EMC in a unique position to help customers and partners transform their businesses and be successful. Taking into account the market-leading assets within our portfolio built around the mega-trends of cloud computing, Big Data and trusted IT, as well as the energy and innovation with which we are delivering these technologies to customers, we are confident that our long-term strategy is the right one.

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, Atmos, MCx, VNX, ViPR and XtremIO are registered trademarks of EMC Corporation in the United States and/or other countries. Cloud Foundry, Pivotal and Xtrem Labs are registered trademarks or trademarks 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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