EMC racked up $2.1bn in services revenue in 2004, accounting for 26% of the group total. In the fourth quarter, services sales grew 35% to $624m, which outstripped the company’s 24% increase in product revenue to $1.7bn.
The majority of EMC’s 7,500 services employees are involved in implementation and maintenance services, and the acquisitions of Legato and Documentum have boosted services sales by adding extra chunks of product integration and support revenue.
However, the takeovers are also driving the company to extend its range of services to cover its growing software portfolio and to meet more complex client demands, according to EMC.
Nigel Ghent, marketing director UK and Ireland, said: We will continue to see services grow as a proportion of our overall revenue. The consulting and managed services piece is now growing faster than implementation.
EMC does not break its services revenue down by its four main areas: consulting; implementation and integration; support and management; and training, which makes it difficult to assess how fast the various parts of the business are expanding. The company did state in its last financial results that software maintenance accounted for 37% of total services revenue in full-year 2004.
But EMC insists that increasing demand for information lifecycle management, a data archiving process that automatically moves data to the most cost effective storage media available, is driving more complex consulting and managed services projects. ComputerWire understands that as much as 30% of EMC’s services business in the UK is now in the consulting space.
Mick Bradley, manager for network storage solutions at EMC, said: ILM is building momentum, which demands more upfront planning and transformational services. He pointed to areas such as application alignment, data policy definition, and recoverability assessment as focuses for EMC’s consulting business.
Bradley said much of EMC’s consulting work that is focused on the broader business process transformation around ILM tends to be handled by its consulting partner Accenture Ltd.
EMC joined forces with Accenture in July 2002 to set up a consulting division called Information Solutions Consulting, which was aimed at tapping into the growing market for storage services market.
ISC initially comprised 100 EMC employees and 100 Accenture employees, focused on developing platform-independent storage services, with Accenture paid for its resources and time, as well as its ability to grow the business. The operation’s headcount has since grown to 250, which still represents only 3% of the overall EMC services workforce.
