A combination of fast growth in IT spending and an even faster growth in EMC revenues in such key markets as storage, virtualization, and security technologies is putting EMC on track to become a $28 billion company in only three years.
David Goulden, executive vice president and CFO at EMC, on Tuesday told financial and industry analysts at the company's Strategic Forum that his company expects a 5 percent and 7 percent cumulative annual growth rate (CAGR) for IT spending through at least 2014, which he said is in line with most analysts' expectations of growth between 3.9 percent and 6.6 percent.
However, Goulden said, the markets in which EMC has the leading position, including storage, virtualization, and security, are growing even faster than IT spending as a whole, and that EMC's total addressable market in those areas is growing at a 10 percent CAGR.
"So we're addressing markets that are growing faster," he said. "And that's a good thing."
Some of the fastest-growing markets are the very same markets where EMC is making its biggest investments, Goulden said.
For instance, he cited the scale-out NAS market, which was a big hole in EMC's product line-up until the company in November made a $2.5 billion investment to acquire Isilon.
The second of those fastest-growing markets is midrange storage, which EMC is addressing with the release last month of its new VNX and VNXe entry-level storage products. Those products are the first from EMC to address the sub-$25,000 storage market, an area where EMC really did not focus before, Goulden said.
The third area is converged infrastructure, which combines storage, server, and networking resources into a single platform. Goulden said converged infrastructure is aimed helping ease the building of cloud computing infrastructures, an area which EMC is addressing with VCE, a company in which EMC, Cisco, Intel, and VMware have invested. "We believe this will be the fastest-growing segment of the market overall," he said.
Overall, while EMC expects the CAGR of its Symmetrix enterprise storage, storage services, and information infrastructure group (IIG) to be under 10 percent through 2014, Goulden said the company should see between 10 percent and 19 percent CAGR for its VNX and VNXe lines, EMC consulting, and RSA Security during that time. However, the company expects its VMware, data consulting, Isilon and Atmos, and Data Domain businesses to grow over 20 percent annually through 2014, he said.
As a result of this growth, EMC thinks it has the potential to become a $28 billion-plus company by 2014, Goulden said. This compares to the $17 billion the company reported for 2010.
EMC is expecting what Goulden called the "triple play" of growing market share faster than the industry, growing revenue at a faster rate than the industry, and growing earnings per share at a faster rate than its revenue.
"We think this is exciting, and that we are one of the few companies that can put this together," he said.