EMC Corp’s strong third quarter makes it likely the company will achieve $400m software sales this and $600m next. It did $118m on software in the third quarter. Moreover, Merrill Lynch & Co notes that EMC has sold software to only 30% of EMC’s 27,000 installed Symmetrix system users. The numbers also show that EMC’s McData subsidiary’s sales were off 34% year over year. the brokerage says that’s because the decline in sales of Escon switches for S/390 mainframes (and 95% of these sales are to IBM Corp) outpaced the uptake of the new Fibre Channel version. Reseller sales accounted for 25% of EMC’s revenue, with sales to Hewlett- Packard Co up 22% year over year to $165m, although this was down from the second quarter’s $186m. Merrill believes HP remains committed to the EMC relationship based on a recent CEO powwow between EMC CEO Michael Ruettgers and HP’s Lew Platt, even though HP is currently reviewing its entire storage strategy. EMC told the brokerage it’s winning 50% of the storage sold with Sun Microsystems Inc’s Starfire systems and that Sun’s doing little storage business outside of its base. EMC thinks it will be doing $10bn by 2001.
