"Our goal is to be a leader in low-end storage, too," said Joe Tucci, CEO of the Hopkinton, Mass.-based company, during a conference call discussing second-quarter earnings.
The AX150 is not sufficient, and an entire product family is needed, he said. The company's April reseller agreements with Intel and NEC hint at the company's direction, he said.
Tucci did not say when the new products would be available.
Tucci said he was "deeply disappointed" in EMC's quarterly earnings, adding that execution was not up to EMC standards.
Revenue for the second quarter of 2006 was $2.57 billion, 10 percent higher than the $2.34 billion reported for the second quarter of 2005. Net income for the quarter was $279 million, or 12 cents per share, compared with second-quarter 2005 earnings per share of 13 cents.
The company had expected to earn at least $2.66 billion and 13 cents per share this quarter and issued a warning earlier this week that it would miss that target.
Tucci blamed the shortfall on the transition from the Symmetrix DMX2 to the DMX3. He said the company was overstocked with DMX2s and had insufficient inventory of the DMX3s.
In addition, a number of customers bought the DMX3 along with several other products but stipulated that they all be shipped together, which meant that EMC did not realise the sales from those additional products as well, he said.
All new Symmetrix builds will be DMX3, Tucci said.
EMC was more successful in some of its non-storage areas. For example, VMware revenue was up 73 percent and content management was up 79 percent. In general, EMC's acquisitions did well, which Tucci said was due to leverage.
Tucci also addressed the company's most recent acquisition, RSA Security. RSA's CEO, Art Coviello, will continue to lead the company, which will be in EMC's information security division, and it will retain its own specialised sales, marketing and development.
RSA will continue to develop an independent security franchise in addition to looking for synergies with EMC, he said.
EMC also lowered earnings expectations for the year to $10.8 billion, with earnings per share of 51 cents.
EMC wants to build a much stronger low-end drive array business. Perhaps we are going to see the launch of a BX-Series to fit between the AX and CX? Perhaps it is going to be an expansion and wholesale refresh of the AX line?
It means stronger competition for suppliers such as Nexsan, Dot Hill, LSI Logic and Xyratex as EMC adds whatever it thinks it needs to a box of disks to turn a JBOD into a useful array. It's interesting that Dell isn't mentioned alongside Intel and NEC.
With IBM and NEC also wanting to increase their SME sales, customers could look forward to a sudden rush of well-specified product at very good prices.