I interrupt my series on autonomous computing to comment on an interesting note that recently crossed my desk. This interesting story I have filed under the heading of "Beware the investment analysts." The EMC rumour mill is grinding away again, and it's still cranking out the same old song about the impending doom of one of the storage industry's largest players. EMC, as far as several financial analysts are concerned, is just about ready to slip beneath the waves.
The stock market has dropped some more, and so has EMC's share price. But not much else is different. As EMC's stock keeps slipping, the various and sundry members of the financial community keep pounding away. A recent list of suggested EMC acquirers - presumably based on business intelligence that is at least as insightful as that used by Wall Street in its analysis of Enron, Tyco and Adelphia - includes BMC (again), Cisco (a new entrant), Dell (again), Hewlett-Packard (another new entrant, although clearly not a newbie when it comes to acquisitions) and IBM (again, but maybe not seriously).
EMC's stock may have plunged, but don't start playing taps just yet, folks. Keep in mind that in addition to some pretty draconian streamlining the company continues to make significant headway in several areas of its strategic direction. Amid all this doom-saying, you should remember that even though the Symmetrix high-end storage servers will represent a diminishing part of EMC's overall revenue, this will be counterbalanced by the following:
- The Clariion line of midrange servers continues to ramp up.
Expect to see several new, competitive additions at the low end in the near term, and expect to see Dell both building and selling them for EMC.
- The reemphasized focus on building software revenues continues to make progress (although it is still too early to gauge the success of the AutoIS initiative). The target is 30% of total revenue.
- Service revenues are aiming to ramp to about one-fifth of total revenue.
EMC isn't going away. And most financial analysts, for all the understanding they seem to have of the storage business, might be better off going back to writing such books as "How I Made $40 in Real Estate."