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EMC COO Outlines How EMC Will Be A $30B Business By 2016

EMC President and COO David Goulden on Wednesday told analysts that EMC will continue to take market share in the fastest-growing parts of the storage market to become a $30-billion business by 2016 by leveraging huge marketing and acquisition investments.

EMC on Wednesday laid out how it plans to become a $30-billion company by 2016 by not only growing each of its primary storage businesses but also growing them faster than its competitors in each of the individual storage sub-markets.

David Goulden, EMC president and COO, said during the EMC and VMware Strategic Forum for Institutional Investors that EMC has seen its revenue grow about three times faster than the storage business as a whole, and that there is no reason to believe that won't continue into the foreseeable future.

"We believe we are well positioned to grow faster than the marketplace," Goulden said.

[Related: EMC, VMware To Launch Pivotal Initiative As Separate $300M Firm ]

Including EMC's storage business, its VMware business, and the business of its new Pivotal Initiative, EMC expects a CAGR, or cumulative annual growth rate, of 8 percent between 2012 and 2016, Goulden said.

"But we don't plan to maintain share," he said. "We plan to grow share."

Over the last five years, EMC's CAGR has been 10 percent including revenue from its acquired businesses, or 7 percent if the acquisitions are not included, which has been about three times that of the IT market as a whole, Goulden said.

EMC's growth has come from a number of factors such as the $20.9 billion the company has invested in marketing between 2008 and 2012, including a heavy investment in the channel, Goulden said.

"We're often mentioned as No. 1 in the channel marketplace," he said, referring to CRN's ARC (Annual Report Card) awards, which in late 2012 saw solution providers name EMC the top-rated vendor in the enterprise network storage and SMB network storage categories.

During that time, EMC has also made $9.1 billion in acquisitions of technology developers in the cloud, big data and security markets. That included $7.6 billion in acquisitions of companies that initially brought EMC annualized revenue of $800 million but which accounted for $3 billion of revenue in 2012.

Goulden said it also includes $1.5 billion on acquisitions that have yet to bring new revenue, including all-flash storage array developer XtremIO and cloud-based mobile file share developer Syncplicity, as well as VMware's acquisition of software-defined networking developer Nicira and big data analytics developer Cetas.

"We believe this has been a very prudent, a very wise allocation of cash," he said.

NEXT: A Business-By-Business Look At EMC's Storage Growth


Goulden broke down the individual parts of EMC's storage business and how the company expects them to grow through 2016.

Goulden said EMC estimated the total addressable market for high-end storage to be just under $10 billion, of which EMC accounts for about 50 percent with its VMAX arrays, Fully Automated Storage Tiering (FAST) software and related services.

This business will continue to grow with a CAGR of between 1 and 3 percent through 2016 thanks to the growing demand for high-end workloads that require multicore scaling and hybrid arrays, he said.

The second storage business, unified backup and recovery, has a total addressable market of $27 billion and a CAGR of between 3 and 6 percent, Goulden said.

EMC, thanks to its midrange VNX and VNXe arrays, Data Domain and Avamar data protection appliances, Networker data protection software and other products, accounts for about 21 percent of the total market, he said.

Emerging storage, the third part of EMC's storage business, includes scale-out NAS, PCIe flash and flash arrays, and software-defined storage, and has a total addressable market of nearly $4 billion and a CAGR of over 25 percent, Goulden said.

EMC has a market share of over 20 percent in that space thanks to its XtremIO flash array, EMC Atmos cloud storage platform, VPLEX converged infrastructure and RecoverPoint software, he said.

Goulden said that EMC is increasing its market share in all these areas, as well as in the security business with its RSA offering and in content management. The only area where EMC is seeing a retreat in market share is in what he called the "other storage" category where EMC has dropped its consumer storage business with the exception of its Mozy cloud storage offering.

PUBLISHED MARCH 13, 2013

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