EMC's Tucci: HP's EDS Buy Won't Impact EMC-EDS Relations

Tucci said in a press conference that he also expects the storage market to do well despite a softening in the U.S. economy, and that Hopkinton, Mass.-based EMC expects to enjoy strong growth in the consumer, SOHO, and small and midsize business markets.

He was talking to reporters on Monday after his keynote presentation at the EMC World conference, held this week in Las Vegas.

In response to a question from an Everything Channel reporter, Tucci acknowledged that EDS, the Plano, Texas-based systems integrator and services company, is a major partner of EMC.

EMC arch-rival HP, of Palo Alto, Calif., said last week that it plans to acquire EDS in a deal worth $13.9 billion.

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"EDS is an important and close partner of EMC," Tucci said. "And I think they would say the same thing. The comment I would make is, a lot of customers are sold on best of breed solutions. A lot of customers are sold on EMC. I believe EMC will be a big partner [of ours] over the long term. EDS's Agility Alliance is a long-term development. I don't think EDS will abandon the EMC relationship."

The Agility Alliance is a group of vendors such as EMC; Cisco Systems, San Jose, Calif.; and Microsoft, Redmond, Wash., who work with EDS to offer seamless integrated solutions.

The complete solution approach to the IT business of companies like HP and Armonk, N.Y.-based IBM vs. the focus on specific technologies of companies such as EMC is not an issue in HP's pursuit of EDS, Tucci said.

"Both strategies have their advantages," he said. "But history shows that companies like ours' tend to grow faster. . . . HP's acquisition of EDS is not a good strategy, not a bad strategy. HP's acquisition is good for HP's strategy."

EMC's own pending acquisition of Iomega of San Diego, Calif. is a part of its overall strategy of preparing to enter the consumer and SOHO market, Tucci said. EMC has already made its first move into the market with the release earlier this year of its LifeLine Linux-based software for building home and SOHO storage appliances with a starting price of under $500, he said.

"The LifeLine software will run on Iomega hardware," he said. "You'll hopefully see it run on the hardware soon."

Hundreds of thousands of individual consumers and thousands of large companies are customers of the Mozy on-line data protection business which EMC acquired last month, Tucci said.

"In the future, we want millions of individuals as customers, and more large enterprises, and we want to expand more into the midrange business space," he said.

Dell, of Round Rock, Texas, currently accounts for about 15 percent of EMC's revenue, a figure which Tucci said should see little impact from Dell's acquisition earlier this year of EqualLogic, which produces iSCSI storage appliances which compete with some of EMC's products.

"EqualLogic's offering could compete with us in low-end iSCSI," he said. "But coopetition is the name of the game. Dell will be an important partner for us for a long, long, long, long time. They will partner with us on some products, and compete on others. But that 15 percent of our revenue includes software and different hardware products."

Tucci also said that he is seeing a slow-down in the U.S. market, but that the market is still pretty good. "It's a little slower than in the previous few years," he said. "I think the U.S. government is doing a good job. We're still seeing growth. We're still seeing opportunities, some by plan, some by luck."