Could EMC join the ranks of companies at the very pinnacle of the IT business? What is going to stop it?
There are big storage companies: EMC; NetApp; HDS; and bigger server companies that sell storage too: IBM; HP; Dell; Sun, and there are gigantic IT companies: IBM; Intel; Cisco; and Microsoft. NetApp and HDS are storage companies. They sell disk arrays - lots of them - and storage software and they know that storage hardware commoditisation is happening and are steadily building up their storage software portfolios. EMC knows this too but it isn't just building up its storage product portfolio. It has aggressively built a storage software portfolio, largely through acquisition, but it has also built up other legs of a software product structure.
The biggest leg is server virtualisation software with VMware. Another one is document management with Documentum and a third is security with RSA. The VMware acquisition has proved a massively successful buy. The RSA purchase seems bang on target with information security being the hot topic it is. Documentum and other products are being built up into an information management business. In fact EMC seems now to be marketing itself as an information management company: We store it; we secure it; we manage it; and, by the way, your applications can process it on our virtualised Windows servers.
EMC is not just a very astute and highly capable acquirer of other people's technology. It's Centera product is still a world leader in the content-addressable storage market, years after it was introduced. EMC has built up a terrific Centera partnership structure that has CAS-based applications pulling Centera sales in their wake. EMC's ability to in the network-attached storage (NAS) space is good too, witness its catching up and overhauling of NetApp.
Certainly NetApp now has a lead in the iSCSI space and EMC appears to be blind to the attractions of iSCSI but the company has exhibited technology u-turns in the blink of an eye in the past and will do so again. Would anyone care to bet that EMC won't acquire iSCSI technology if that SAN technology carries on growing strongly?
No other storage company comes close to EMC in its ability to acquire companies and technologies and build them into a coherent set of products inside a coherent strategy. Sure there are less successful aspects of its business - what is happening with Retrospect and Insignia? - but EMC's ability to make lightning-like strikes on bulls eye technology companies continues unabated.
The Avamar data de-duplication buy was a brilliant example of this. It gets a 20:1 de-dupe ratio product company and then, through mind-bogglingly brilliant marketing doubles this and beyond to 50:1 by coming up with remote office and data centre hub layers of de-duplication to have a second bite at the ROBO de-duped data at the data centre. Every other de-dupe product company could come up with the same scheme but none has. It leaves EMC being able to claim a cumulative de-dupe ratio far higher than its de-dupe competitors who are sticking at the single shot de-dupe level.
To my mind this kind of brilliant marketing combined with tremendous technology acquisition and energetic product evolution makes EMC a rare beast in the IT jungle indeed, a very rare beast. What is to stop it growing up to the very front rank of IT companies? It might constrain its own growth through self-doubt and mis-steps but I can't see this happening yet. My feeling is that EMC is capable of continuing to outpace every other storage company and join Cisco, IBM, Intel, and Microsoft at the pinnacle of the IT business.