Interesting bits around EMC

In the last few days, issues around EMC have become publicly known. EMC is the worlds largest and most profitable storage company, and has a federated group of businesses that are complementary to it. The CEO, Joe Tucci, is stepping down next year, and there is a succession “process” going on.

Couple this to a fundamental shift in storage, from arrays to distributed tightly coupled server storage, such as Unison, which is problematic for their core business. They are a huge revenue and profit generator, but there is no real growth left in the array business.

Moreover, you have companies like Pure Storage, Tegile, Tintri, Nimble, and a multitude of others all attacking EMC at its core market. Take a shrinking market, add in strong competition while decreasing the size of the market. Of course the competitors will also, eventually, have to deal with the fundamental evolution of the market, but until then, they can just attack the incumbent.

EMC is being forced into a difficult defensive posture, with the majority of the upside being no growth and simply treading water. The down side to losing market share to the upstarts is that will lose revenue and profit faster than the natural shrinkage of the market itself.

This is not that storage is a decreasing market, it decidedly is not. Its that the array portion is in a long term decline.

This is reflected in some analysis from the folks from Wikibon and others.

Unfortunately, this doesn’t spell good things for traditional array vendors. Like EMC.

This is a classical case where some good creative destruction is needed in the market. EMC would be best to do it to their own products, as Pure et al. will most assuredly do it to them if EMC does not.

This is usually very hard to do in larger companies, as many have entrenched power structures that resist the sort of changes needed.

Hopefully EMC can navigate these waters. Though as it seems, their discussions with HP have come to a grinding halt. That’s one way to solve the issue, break up the federation, sell off assets, and reorganize and reconfigure the rest.

Should be an exciting time for them. Sadly, not in a good way.

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