EMC Corp reported its fourth consecutive quarter of revenue and income growth over 30% yesterday, reporting first quarter revenues of $828m, up 34% from the same quarter last year, and income of $146m, up 32% from the first quarter 1997. Earnings per share rose 27% to $0.28. EMC president and CEO Michael Ruettgers said that such a sustained level of growth was unusual for a company of EMC’s size, pointing out that the 34% revenue increase was the highest year-to-year quarterly growth rate in nearly three years. During the quarter, EMC doubled the storage capacity of its Symmetrix line with the transition to new 18Gb and 47Gb drives. It also saw booming sales of its multi-platform fibre channel connect for the Symmetrix systems, particularly to HP-UX, Sun Solaris and Windows NT customers, and reckons it is now the biggest supplier of fibre channel storage in the marketplace. Fibre channel associated revenues in the quarter were $140m, or 20% of total revenues, a figure showing sequential growth of 35% over the previous quarter. Software sales, especially of the SDRF data transfer and TimeFinder backup administration software, helped boost EMC’s gross margins to 48%, and generated revenues of $66m. OEMS and resellers accounted for 30% of the quarter’s revenue, with Hewlett-Packard Co responsible for $160m worth of business. EMC added a new OEM in the shape of Silicon Graphics Inc during the quarter. Only the mainframe network switching subsidiary McData Corp saw revenues essentially flat on $41m. Ruettgers said he was optimistic that future products would change that, but said he wouldn’t want to say just how optimistic for another quarter or so. Services and rental revenues added a further $22m. Open systems vendors and PC manufacturers flocking into the storage market appear not to be worrying EMC. Ruettgers said that EMC came across Sun Microsystems mostly at other Sun sites, and said that it was increasingly picking up business from Sun customers. He claimed that Tuesday’s deal between Compaq Computer Corp and StorageTek Inc was more of a networking and tape development relationship than an enterprise storage agreement, and claimed that EMC had been working with Microsoft Corp on scaling up NT for enterprise systems. Resumes from DEC’s StorageWorks division, on the way to Compaq, were coming in thick and fast to EMC, he claimed. Ruettgers said it would be 1999 at the earliest before IBM would be able to offer the kind of data center consolidation features EMC currently offers and that Hitachi Ltd was still primarily a supplier of mainframe storage, despite its recent announcements. EMC is on the lookout for acquisitions, particularly in the areas of software and professional services, and says it wouldn’t be surprised if a couple had been closed before the end of the year.
