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EMC Analyst Day - Thoughts and Opinions

Spurning the stack approach is key to EMC strategy

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EMC held an analyst day on November 15th. Even though 2012 is not over yet, this event rounded off an eventful year for EMC which made several industry moving announcements including a major reorg.

EMC executives shared a lot of their vision, strategy and product futures with us analysts. Because of heavy "no-tweet" content that was shared during the event, much of it is off limits for this post. However some key highlights are worth sharing.

EMC is not the one to shy away from making fantastic proclamations about the future of the industry is a part of - and the market that it plays in. This has largely driven its vision, strategy and tactical initiatives, including in a large part, their M&A strategy. It has amassed quite a warchest of products and solutions over the years. As David Goulden put it, EMC is a serial innovator and a market consolidator.

But something different is happening at EMC now. Unlike the EMC of yesterday that was basically a serial acquirer with integration plans only as an afterthought, the EMC of today is actually weaving together these products to create solutions. What's more is that Joe Tucci is using this as premise to change the culture at EMC. He is breaking down the walls, making teams collaborate with each other and making them come up with best of breed solutions, not just independent products that overlap with each other.

The EMC of today is a much more streamlined machine, a much humbler and modest industry player but nevertheless razor focused on its vision to be a force to reckon with.

Is it all a walk on rose petals from here? Absolutely not. Key challenges do remain - such as maintaining differentiation between overlapping products, dealing with competitors on many fronts and a slow and depressed market. But I think the biggest challenge EMC faces today vis-a-vis some of its major competitors is that EMC lacks the arsenal to create vertically integrated stacks.

Unlike its competition that has created vertical stacks using their own compute, network and storage technologies, EMC depends on a collection of trusted partners like Cisco, Lenovo and others. EMC executives vehemently support this strategy and arguably it has some real benefits for its customers. But it is the perception in the market that EMC will have to worry about.

Here are some more highlights from the EMC Analyst Day:

  • EMC is jumping on board the software defined data center "revolution" big time. EMC execs spent a lot of time articulating their strategy for SDDC which brings together storage, networking, servers, security and management into a coherent solution. There was much talk of how VMware's Nicira acquisition will shape SDDC, but EMC was quick to point out how it does not intrude on the turf of its most beloved partner, Cisco.
  • EMC's cloud infrastructure strategy is a three part play. The first is to build out this infrastructure using an all EMC portfolio - as EMC put it - best of breed infrastructure components. The second is deploy a converged infrastructure using VCE VBlock. And finally the third is to deploy an infrastructure using proven partner ecosystem a.k.a VSPEX. It needs to be highlighted here that EMC is differentiating it's cloud play from the rest of the competition. Unlike the vertical stacks or mega cloud players, EMC wants to remain a horizontal best of breed components play that is based on virtualisation and SDDC at the core. EMC is also trying to make security a big part of the cloud equation. It is bringing its RSA division closer to its mainstream portfolio
  • EMC's Big Data strategy is a four-part play. It starts with its scale-out content platform otherwise known as Isilon. It then builds its MPP/Analytics platform a.k.a Greenplum UAP, followed by Social Data Science, deployed on its Greenplum Analytics Lab. And finally it adds agile analytics applications using its shiny new acquisition Pivotal Labs.
  • EMC's Flash strategy is taking shape in the form of a newly formed Flash Products Division that is focused on server side flash, server networks and finally flash in the array. EMC maintained that it did not want to get into the flash hardware businesses and will leverage OEMs here with its own focus on software.
  • EMC discussed its Syncplicity and its enterprise grade answer to the sync-n-share solutions out there. It has reenergised the Documentum unit by tying Syncplicity to Documentum.
  • Disruptive forces according to EMC are: x86 multi-core, virtualization, flash and cloud (IAAS) in the Infrastructure space and mobile, social, Big Data and Cloud (P/SAAS) in the Applications space. Expect its product strategy to be largely focused on being an enabler or a market mover in these categories.
  • EMC largely sees its storage products to move along the workload map as it calls it. On the X-axis it is simplicity/low cost vs. advanced data management. On the Y-axis it is performance vs. capacity. According to EMC (some of these are IDC numbers), the transactional segment (which is in the top right quadrant) will become $25B in 2016, growing at 6.5% CAGR. The performance segment (which is in the top left quadrant) will become a $15B in 2016, growing at 10.3% CAGR. And finally the content segment (which is a bottom left quadrant play) will become $13.5B in 2016, growing at 19.6% CAGR. EMC's strategy, move its products along the axes to fill in voids.
  • EMC's sales strategy has morphed to become more of an "Educate, Inform, Empower". This has come a long way from the old strategy of "Sell, Sell, Sell". It is a huge shift to change the culture of the sales org. to educate customers on cloud, virtualisation and big data. EMC's challenge as Scannell put it is to educate the application owners, DBAs on why EMC offers a better value proposition vs. the competition.
  • EMC took the time to describe how it is eating its own dog food and is successful at it. EMC IT today is over 90% virtualised. It has one the largest deployments of virtualised SAP environments deployed at a brand new state of the art data center in Durham, NC. The SAP environment features a 12TB Oracle 10g R2 database that contains 8.8 billion rows of data and handles 57M transactions/day.

The phrase "Execution is key" has become fairly generic and is often overused by execs when talking about "What keeps them awake at night". In EMC's case, Execution is really key - it cannot afford to take their eye of the road nor take their foot off the gas pedal. It was a good day at EMC, watching them show us how they drive their armada...otherwise known as the EMC machine.

Posted by Ashish Nadkarni

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