EMC: No Longer Alone on Top

By Steven Vonder Haar  |  Posted 2002-06-17 Print this article Print

Dossier: Once a leader in the seemingly mundane area of data storage, EMC had a reputation for being able to do no wrong. Things have changed.

No Longer Alone on Top

EMC Corp. was once one of the darlings of high technology, a leader in the seemingly mundane area of data storage whose outsize profits in the Internet's heyday gave it a market value well in excess of $100 billion, and its management a reputation for being able to do no wrong.

Things change.

In the last two years, a formidable new set of competitors has marched into the storage-area-network (SAN) market that EMC helped pioneer, even as the dot-com-propelled spike in demand for storage space has disintegrated. One result is that EMC has lost some of its historical pricing power.

"EMC's maintenance costs are double everybody else's," complains Fernando Sandoval, a senior network analyst with Rich Products of Buffalo, N.Y., who nevertheless describes himself as a satisfied EMC customer.

Indeed, the customers most loyal to EMC see the company's high prices as being justified by EMC's reputation for reliability. At Austin Radiological Associates, for instance, Chief Information Officer Todd Thomas spent more than $2 million on a SAN capable of handling 500,000 x-rays and other medical images annually.

"The doctors look at it as a comfort factor that images will always be available to them," Thomas says.

"EMC certainly knows how to do a project," he adds. "I've gone through four major projects during my time at Austin Radiological, and the implementation with EMC was the one that went the most smoothly."

But EMC's high prices have driven other customers away. Mehul Mehta, the chief technology officer of BigVault Technologies, a provider of outsourced storage services, opted to build his 4-terabyte SAN using hardware from Compaq.

"EMC is a great product, but it did not offer any extra benefits that would warrant paying more," says Mehta.

The criticism and declining revenues have prompted EMC to adjust its strategy; the company has become as interested in midsized companies as in the titanic companies that were once its main focus. And the humbling results of the last two years have changed EMC in a more subtle way.

"In the past there has been an arrogance about the company," says Dave Schoening, who manages SAN efforts at Sears, Roebuck and Co. "The competition has mitigated their arrogance to a certain extent."

Company Information

EMC Corp.
35 Parkwood Drive, Hopkinton, MA 01748
(508) 435-1000


Ticker: EMC
Exchange: NYSE
Employees: 19,200

Michael Ruettgers
Executive Chairman
Prior to the beginning of EMC's troubles in 2001, Ruettgers had guided the company to huge growth as CEO.

Joseph Tucci
President and Ceo
Tucci took the reins of EMC in January 2001.

Frank Hauck
Executive Vice President, Customer Operations
Hauck has held a string of management roles at the company since joining in 1990.

Key Products:

Along with its franchise Symmetrix product line, EMC offers products ranging from network storage applications to the automation of enterprise storage systems.

Reference Checks

Rich Products

Senior Network Analyst
(716) 878-8128
Project: SAN deployed in 2001 to enable server consolidation and position company's data network for long-term growth.

Austin Radiological Associates

Todd Thomas
Chief Information Officer
(512) 795-5100
Project: EMC system used to manage library of digital x-rays for doctor's group that processes more than a half-million x-rays annually.

First Union Bank

Gary Fox
Manager, Enterprise Data Storage
(704) 427-3441
Project: Manages a 500-terabyte data system that runs primarily on SAN systems developed by EMC. Now embarking on project to interconnect the storage networks to build a more comprehensive enterprise storage back-up system.

Delaware North

Dave Meacham
Director, IT
(716) 858-5000
Project: Deployed an EMC system in 2000 that is now used to manage financial, human resources and reservations systems data.


Scott Carpenter
Manager, Integrated Systems Support
(512) 340-3737
Project: Netsolve's $1.8 million SAN from EMC is used in support of all the production databases in its 200-server network.

Sears, Roebuck and Co.

Dave Schoening
Technology Director
(847) 286-8941
Project: Has installed a SAN infrastructure—built with expansion in mind—that can accommodate more than 200 terabytes of data when fully configured.

Executives listed here are all users of EMC storage products. Their willingness to talk has been confirmed by Baseline.


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