EMC`s ABC of storage

Massachusetts-based storage company EMC Corporation has a current market capitalisation of over $200 billion. It plans to invest over $1.5 billion in research and development, and to recruit almost 20 000 new employees worldwide over the next two years.

The company has focused on enterprise storage since its establishment in 1979. Today, EMC counts among its clients global heavyweights such as Deutsche Bank, British Airways, PSInet and Japan`s NTT DoCoMo.

We`ll generate $14 billion on software this year, as more companies invest in information management and protection solutions

Mike Ruettgers, CEO, EMC

Locally, even though clients like Telkom use its storage management solutions, the company is not as well known as its primary competitors - Dell Computer, Compaq, IBM, Hewlett-Packard and Hitachi.

This is perhaps reflective of EMC`s global expansion strategy. To all intents and purposes, EMC has no plans to make headway in developing markets where the technology infrastructure is shaky at best.

Though the company has offices in Johannesburg, Cape Town and Durban, and has opened offices in South America and Eastern Europe, company CEO Mike Ruettgers says: "You do need computers before you need storage."

A current priority, Ruettgers notes, is the developing Asian market. EMC is focusing strongly on its operations in Japan and China. "We`re probably investing ahead of market evolution here, but with the amount of money entering those markets, one has to [be prepared]."

The company will hold off on other developing markets until there is a need for its products and services. These include its flagship Symmetrix and CLARiiON storage systems, Celerra file servers, and related software management products deployed atop what EMC calls its E-infostructure.

Elsewhere, EMC has spent some time and considerable amounts of money on the acquisition trail.

The company acquired Data General Corporation, manufacturer of the CLARiiON storage products which are now fully integrated into EMC`s product line. Ruettgers says the company has since acquired four software companies for a total of almost half a billion dollars and will acquire more before the year is out. The issue driving the acquisition spree, says Ruettgers, is time to market.

In August, EMC acquired the Avalon Consulting Group, a supplier of rich media management software for the television broadcast industry. The company now operates a unit of EMC`s Media Solutions Group. EMC senior VP for product management, Jim Rothnie, confirms the Avalon acquisition will not standalone. "[The industry can] expect to see more in that area."

EMC has been criticised in the past for its proprietary software solutions which run only on EMC hardware, potentially locking customers in. The introduction of the EMC E-Infostructure Developers Program opens EMC`s storage Application Programming Interface to its development partners. The opening of these interfaces will allow them to develop products that provide the full functionality of the storage system to multiple OS and server platforms.

Industry consolidation has seen large enterprises flocking to what Business Week describes as "the four horsemen of the Internet" for their e-business requirements - Oracle for databases, Sun for servers, Cisco for networking and EMC for storage.

The companies involved were quick to capitalise off this informal partnering of products. EMC, Cisco and Oracle have officially joined forces to form their ECO-Structure initiative. The product is a joint e-business suite - the aim of which is to simplify implementation of high availability e-business infrastructures.

Despite the company`s storage focus, the software side of its business has proven increasingly profitable - so much so that EMC now views itself as a software company. Some 75% of its research and development will be ploughed into software.

This echoes along the lines of Ruettger`s oft-espoused theory of disruptive technology. Summed up, it advocates disrupting your own business model before someone else comes along and disrupts it for you.

Ruettgers explains the reasoning behind EMC`s shifting goal posts: "Global 2000 companies double their information on an annual basis, but there isn`t an equal increase in staff to handle that information. You can`t stop the flood of information - so businesses must learn to manage it through consolidation and automation tools."

The hardware is also evolving - the technology now being sold in the Symmetrix data centres is much more sophisticated than its original predecessors, says Reuttgers, to the point where 36GB of information can be stored in a space the size of a shoebox.

It`s this kind of innovation, says Ruettgers, which is driving down the price of storage by about 30% a year. This means more companies find themselves financially capable of investing in storage solutions. Critical to the usefulness of a data storage solution is the software one uses to extract valuable information from the raw material.

EMC`s products such as TimeFinder, ControlCenter, PowerPath and its flagship risk management and data mirroring product SRDF are the key to the company`s success in this market space. They enable customers to manage, protect and share information on an enterprise-wide scale.

"We`ll generate $14 billion on software this year, as more companies invest in information management and protection solutions."

There has been a great deal of industry speculation as to the interoperability of various storage architectures, notes Rothnie. The concept of the enterprise storage network is not new - it`s with talk of storage area networks (SANs) and network attached storage (NAS) that things become slightly more complicated.

Storage area networks (SANs) are storage areas separated from the user network, thus reducing bandwidth load on the network, and allowing for greater storage scalability and reliability. The storage is connected to the server farm via an independent high-speed network connection.

Network attached storage (NAS) is another popular storage technology which makes use of a network appliance and can roughly be described as a stack of drives with a built-in server. This can be directly attached to an Ethernet network, and is capable of sharing data with any linked PC.

The marketplace confusion is inevitable, says Rothnie - they`re similar concepts with similar names - but the differentiators are key.

Rothnie believes the most efficient way to get these architectures to work for your business, is to attach NAS appliances to the SAN, and leverage the ESN off that storage conglomerate. Architectures such as this are driven primarily by the growth of the Internet, he says, and as such, there is no predictable end to storage capacity in sight.

EMC products are deployed across each major industry, says Ruettgers, with a 60/40 split between local and global markets. "We`re hoping to get that to a 50/50 split. In fact, our international business grew faster than local over Q2."

The growth has been centred in the Internet access market, Ruettgers notes, especially in regions where deregulation of the telco operations has introduced a competitive market where market players must suddenly capture significantly more information on each of their customers.

Ruettgers anticipates another growth area in that of rich media. This is directly related to bandwidth availability, and the increased usage of rich media information in the consumer sector. "When people can move more information, they`ll store more information."

The increase in bandwidth will come with the deployment of fibre optic networks - if not next year, says Ruettgers, then shortly after that. The phenomenon has been dubbed the "content big-bang", and is expected to change the face of both the storage and networking industries.