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February 19, 1997updated 05 Sep 2016 12:14pm


By CBR Staff Writer

From Computer Business Review, a sister publication.

Choose storage, don’t just add it, it implores.

Michael Ruettgers is feeling smug. When he took over the helm at EMC in 1991, the company had revenues of $232 million, a stalling add-on memory business, and less than a 1% share of the storage market. Last year, boosted by the phenomenal uptake of the company’s Symmetrix disk arrays, revenues grew to $2.2bn, and the company became the market leader in both the mainframe and open systems storage sectors. Most of EMC’s success has come at the expense of IBM, which, in 1990, accounted for more than three quarters of mainframe storage shipments. By 1995, IBMs market share had nearly halved to 35%, while EMC was up to 41%. IBM still earns more money than EMC in the mainframe storage sector, but EMC ships more raw capacity. The company has advanced at a similarly breathtaking pace in the open systems storage market, quadrupling revenues over the last 12 months. In the space of a year and a half, EMC has become the leader in the $4.6bn, open shared storage sector with a 17% share, compared to IBM’s 16%. I feel more confident about EMC’s prospects today than when I first became CEO five years ago, says Ruettgers. The next step in Ruettgers’ ambitious expansion strategy, however, is likely to prove the most difficult to execute. He wants EMC to become the Microsoft of the storage world – the defacto supplier. But to do that, EMC not only has to keep pushing back the boundaries of disk technology, but to alter the way that users buy storage. The aim, says Ruettgers, is to get users to make their storage decisions in tandem with their application and database purchases, rather than as an adjunct to hardware. We want users to choose the application, the database and then the storage system, says Ruettgers.

There are a number of reasons why EMC feels this is so important, but the primary one is that today’s decision-making process is severely limiting EMC’s sales prospects. In 1996, close on three quarters of the storage capacity shipped in the open systems market was sold bundled with hardware. Although EMC has been successful in selling its products for rebadging by open server companies such as Hewlett- Packard, there are still a large number of companies, such as Sun and IBM, producing their own devices and therefore closed to EMC. We have to associate ourselves with the purchase of enterprise class business applications, says Mike Maunder, head of European marketing. Ruettgers’ strategy to overcome this problem centers on three I’s – innovation, image and integration. The innovation portion relates to the continued advance of Symmetrix. Dick Blasche, vice president of product marketing at EMC, says the latest generation of Symmetrix, launched last month, offers triple the performance of its nearest competitor and has a two-year technology lead. It extends our lead so far, we will be virtually impossible to catch, he says. No-one is making ground on us. The image issue relates to EMC’s reputation in the market. While the company enjoys being portrayed as the young upstart that has eaten IBM’s lunch, it is concerned that users, and partners, do not view it as a true blue chip supplier in the mould of its arch-rival IBM, and will therefore not entrust it with all their corporate data assets. There is, admits one of the company’s marketing executives, an overwhelming desire for respectability among senior managers, which shows itself in the venues chosen for corporate marketing events – always old and prestigious. The European launch of the new Symmetrix range, for example, took place in Le Louvre in Paris, the medieval fortress which now houses Frances cultural treasures. The third, and arguably most fundamental ‘I’ is integration. If EMC is to achieve its aim of separating storage decisions from hardware purchases, it needs to forge stronger relationships with application and database suppliers, and integrate its products more closely with these offerings. This process has already started. For example, Oracle 8, the next version of the market leading open systems database, is being developed on Symmetrix, and EMC is working with Oracle’s key open database rival, Informix, to tightly couple Informixs Universal Server database with Symmetrix to allow users to deploy and manage high-end video applications. Whether these suppliers will take the next step, however, and actively specialize for EMC, remains to be seen.

Given Ruettgers’ track record, he is understandably confident that if anyone can change the dynamics of the storage market, he can. The reward for success is likely to be substantial – unparalleled access to what is expected to be a $50bn market for consolidated storage by the year 2000. Ruettgers does, however, have the humility to admit that it will be his toughest project yet. In hindsight, the mainframe business was simple.

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