By William Fellows
EMC Corp expects Windows NT to be more important to its business than Unix within two or three years, according to CEO Michael Ruettgers. EMC fully expects to be a $10bn company by the end of its fiscal 2001 through organic growth, and expects at least $5bn NT sales in 2002. Reporting fourth quarter net income up 54% at $256.46m over $166.23m last time on revenue up 36% at $1.19bn compared with $873.28m, Ruettgers said sales were strongest into mission critical installations, ERP sites, data warehousing, server consolidation and internet deployments. Earnings per share were $0.48, beating Wall Street’s estimates by a couple of pennies. Revenue from high-margin storage software, where EMC is focusing much effort, climbed by 152% in 1998 reaching $445m for the year compared with $177m in 1997, handily beating the company’s own forecast of $400m. It expects software revenue to grow by at least 50% in 1999. 60% of systems it shipped in 1998 went out with EMC software installed, up from 40% in 1997. On the back of these results EMC claims to be the fastest growing enterprise software company. Enterprise storage sales climbed $170m to $911m in the quarter while enterprise software brought in $164m, up 175% over the same period last year. Strongest growth was in the US and Europe. US sales accounted for 48% of revenue or some $743m in the quarter; Europe, Middle East and Africa was worth $379m or 29%; while sales to Asia/Pacific fell by $6m to $69m. It says its new reseller relationship with NEC Corp (its ninth such partnership) means its will grow sales in the region for the full 1999 period. Resellers account for 25% of EMC’s business. Hewlett-Packard Co shifted $210m of EMC kit in the quarter, up 27% sequentially. HP sales for the year climbed 42% over 1997 to $718m. EMC shipped 2150 storage units in the quarter, 8,100 in the year. 300 were in the small systems segment, up to 600Gb. 1,100 were medium-sized systems, up to $1.8Tb while 750 were large installations of up to 6Tb. Fiber channel revenue was up 192% at $286m. Gross margins were 53.6%. Research and development spending was $95m. EMC says it won the lion’s share of storage attachments to Sun Microsystems Inc servers in extended configurations but conceded Sun does well when storage is embedded within a system configuration.
