EMC Plans Web 2.0 Blitz

Despite an increasingly uncertain economic climate, EMC has posted a strong set of 2007 results, while outlining more of its plans for new Web 2.0, NAS, and security products.

The vendor's fourth-quarter revenues were $3.83 billion, an increase of 19 percent over the same period last year, and above analyst estimates of $3.66 billion. For the full year, EMC's revenues were a record $13.23 billion, 19 percent up on the prior year and higher than the $13.06 billion estimated by analysts.

On a GAAP basis, EMC's quarterly earnings were 24 cents on net income of $525.7 million, 33 percent up on the year-ago quarter.

For the full year, the vendor's earnings were 77 cents per share on net income of $1.67 billion, a 43 percent increase on the year-ago quarter. Analysts had estimated quarterly and annual earnings per share of 22 cents and 70 cents, respectively.

"I am very pleased with EMC's execution and performance in Q4 and for the year," said EMC CEO Joe Tucci, during a conference call this morning.Tucci took the chance to add flesh to the bones of the Web 2.0 technologies he described during the firm's Innovation Day last year.

"2008 will mark EMC's entry into the Web 2.0 market," he said, explaining that an "all new hardware system" already has a limited number of customers. "Look for us to announce an OS later this year and make more of a splash about that technology."

This clearly refers to EMC's top secret 'Hulk' and 'Maui' offerings, which are earmarked for the booming Web 2.0 market. Although the CEO did not refer to either of these codenames during today's call, Maui is rumored to be a highly scalable clustered file system software that will compete with Isilon's OneFS and NetApp's OnTap GX.

EMC is also planning to enhance its NAS product line during the coming months, particularly around the recently launched NS family of Celerra devices. "The NS20 and NS40 are just plain white hot look for us to extend this lineup this year."

Products are also planned for EMC's RSA security business. "In 2008, we will launch the next generation of our authentication platform [and] we will launch our data loss prevention solution based on technology from the Tablus acquisition.Like other storage vendors, EMC is also bracing itself for a potentially difficult year with a question mark still hanging over users' technology spending.

"The economic environment will, for sure, be more challenging and uncertain than it was in 2007, but there will be opportunities for EMC to grow," Tucci explained. "EMC is well positioned in areas that will grow fastest this year."

The CEO promised that EMC is in a much better position to handle an economic slowdown than it was during a similar situation in 2001 and 2002, thanks largely to strong demand for virtualization, storage, and compliance-related products.

"It’s night and day," he said, explaining that in 2001, EMC relied on dotcoms for much of its revenue and was also selling mainly high-end storage. "Our flagship product, the Symmetrix 5.5, was [also] at the end of its product cycle."

The modern EMC has a much broader focus, with the vendor also targeting SMBs, consumers, and recently unveiling its first software-as-a-Service (SAAS) offering.The EMC CEO was also grilled this morning about his plans for EMC's subsidiary VMware, which raised $1.7 billion in an IPO last year.

There has already been speculation that EMC may sell off all or part of VMware to bring in even more money, although Tucci refused to be drawn into this issue when quizzed by an analyst.

"I am not going to go into those specifics now, but both EMC and VMware are performing well," he said, adding that VMware has only been a public company for a short time. "We’re very pleased with the asset mix; we have no plans to distribute at this time."

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