EMC President and Chief Operating Officer David Goulden Discusses EMC’s Third-Quarter 2012 Financial Results

EMC announced third-quarter 2012 financial results on October 24, 2012. 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 24, 2012

What should we take away from EMC’s third-quarter financial results?

David Goulden: I am pleased that EMC showed growth in this challenging environment. Our strategy, balanced portfolio, operational model and ability to execute are paying off near-term and position us well for the long-term. While we need to navigate the shorter-term economic challenges, the longer-term secular changes offer us an opportunity to be really successful. The shifts to cloud computing, Big Data and trusted IT bode well for us, as we have been at the forefront of these for some time.

Cloud computing and Big Data are transforming IT and business. What’s driving customers’ interest in these major IT trends?

David Goulden: These trends are in full force because they enable companies to capture a better return on dollars invested in IT than ever before. Cloud architectures make the infrastructure more agile and efficient, while Big Data enables new insights that can help grow the top line – and all of this must be done in a trusted way. At EMC, we understand that the company that can best deliver this ROI wins, and we continually invest to make this happen. The result is innovative, practical, customer-focused additions to our product portfolio.

How is EMC helping customers address their IT priorities during times when spending is tight?

David Goulden: During times when spending is tight, our focus on high-priority areas of the datacenter, like virtualization, security and storage, serves us well. Customers needing to be extra cautious about where they spend their budgets first direct their dollars to high-impact areas and to the most cost-efficient technology within those areas – in other words, to best-of-breed offerings like our own.

The drive for greater efficiency and business value from IT extends beyond economic cycles and is gaining momentum as more customers shift more of their spending toward cloud architectures – private clouds, public clouds and hybrid clouds. Running a cloud infrastructure means leveraging pools of network, storage and server resources that are dynamically allocated to new and existing applications based on demand. This is not easy. As a result, most companies building clouds, either private or public, have neither the full set of resources nor the IP to build these architectures themselves. A few do, but the rest seek an infrastructure that can get them there without having to compromise on important enterprise-class features. These include capabilities like replication, to ensure data availability and business continuity; efficiency features, like tiering, deduplication and compression; backup with best-in-class recovery point and recovery time objectives; security that is agile and risk-based; and virtualization, a key component for achieving the control, efficiency and choice clouds can deliver.

EMC’s approach, using our own internally developed software integrated with industry-standard hardware that has been tested and tuned, enables us to deliver value to the customer that we believe is unparalleled among our peers. This formula is in lock step with the transition to hybrid cloud and should keep us at the forefront of data center infrastructure.

Does the channel remain a bright spot for EMC?

David Goulden: We have made enormous progress in truly teaming with our channel partners, and as a result, our channel program continues to earn accolades. In the third quarter, EMC was named a “Rising Star” by the Global Tech Distribution Council, and we won four “Company of the Year” Awards by CRN. With continued partner-centered innovation, like the third-quarter enablement of Velocity Distribution Partners to assemble VSPEX solutions for resellers, we expect to remain a favorite among our partners.

How is VCE doing?

David Goulden: VCE continues to do very well, as demand for Vblock systems showed strong growth in the third quarter. This was obviously helpful to our year-over-year growth in the third quarter, as the revenue from our components of every Vblock sold increases our storage and virtualization revenue. Vblocks continue to gain traction both in enterprise data centers as well as in service providers, and we saw this in the third quarter. For example, a US-based chemical company purchased four Vblock systems as part of a solution that also included EMC Data Domain, EMC Avamar and EMC Atmos. A European insurance company purchased a Vblock system alongside several EMC VNX systems. And, a large construction equipment maker purchased Vblock with EMC Data Domain and EMC Avamar for data protection. Among service providers, CSC continues to expand their build out of Vblocks to power their public and private cloud businesses. Additionally, the second-largest telco in Japan, Softbank, will standardize on Vblock for their cloud-based offerings. Softbank is already using Vblock systems for their internal IT operations. In fact, 10 of the top 15 global telcos are now Vblock customers.

Any insight into the remainder of 2012?

David Goulden: Looking forward, we do not expect the economy to get better this year, but we do like how we have positioned EMC near-term and long-term. We have a strategy that is built to leverage the three major waves of change in IT – cloud, Big Data and trust. And, we have what it takes to execute on this strategy with leadership positions in storage, virtualization and security, a best-of-breed product portfolio with breadth and depth that is unique in the industry, a global EMC team that is second to none, and a solid operational and financial model that has demonstrated success across cycles.


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, Avamar, Data Domain, Vblock, VNX and VSPEX 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) 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.