What to Expect From EMC in 2016

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Enterprise technology customers continue to be in either “transactional” or “transformational” spending mode, and in some cases both at the same time. Customers in a transactional spending mode are buying “just enough” and “just in time” for their traditional environments, as we saw in our strong maintenance renewal bookings throughout last year. Customers in “transformational” mode are either transforming their existing IT systems towards a Hybrid Cloud or are building and deploying new digital applications to transform their business. In either of these scenarios, they need a modern data center infrastructure based on Flash, Scale-out, Software Defined, Cloud enabled and Trusted technologies.

At EMC, we have been actively investing in innovation and transforming our storage portfolio well ahead of our peers to position our offering where IT budgets are moving and to accelerate our leadership position in the next wave of IT. To buttress this point, our market share in the emerging storage category is higher in most areas than our share in traditional storage, which is a good indicator of the product leadership that customers can expect from EMC in the future.

2016: the Year of All Flash in Primary Storage

In Flash storage, our all-flash-array XtremIO extended its market lead last year, with 2015 bookings coming in well over a billion dollars; plus, XtremIO’s revenues in Q4 2015 exceeded our closest competitor’s cumulative revenue in this segment for the last four reported quarters combined. We continue to out-innovate the competition with new and unique capabilities including our recently introduced Integrated Copy Data Management (iCDM).  This innovation allows administrators and application owners of critical enterprise applications such as Oracle and SAP to make and automate the management of instantaneous and space efficient virtual copies of their production data.

Flash is not about a single product, it’s a key technology across our portfolio and later this quarter we will take another quantum leap in Flash with the launch of DSSD. It will change the game for flash in the enterprise, delivering mind-blowing performance, bandwidth and latency for high performance business applications like Hadoop Analytics and Ultra-High Performance Databases. We believe that DSSD is unique and highly differentiated in the marketplace.

Also coming this quarter, we will introduce a new flash optimized, All-Flash VMAX storage array that will significantly change the way Flash is deployed in high-end primary storage. And in the second quarter of 2016, we will introduce a new flash optimized mid-tier storage family that will change the use cases for Flash in the mid-tier storage segment.

Converged Infrastructure

Converged Infrastructure continues to grow considerably faster than the infrastructure market in general. In 2016, we expect that more than 20% of all external storage will be purchased as part of a CI system. EMC continues to lead in Converged Infrastructure. Our VCE business had a very good year in 2015 and exited the year with an annualized demand run-rate of more than $3 billion. Multiple customers are spending more than $10 million annually with VCE, and our largest new customer spent more than $70m with VCE.  From a broader trend point of view, customers are shifting towards “buy” instead of “build.”  As a result, they are achieving better total cost of ownership, faster outcomes and a more agile business after deploying Converged Infrastructure.  After successfully integrating VCE with our EMC Information Infrastructure business this past year, we look forward to a continued strong partnership with Cisco to extend our lead in Vblocks and for network systems across our CI portfolio.

This year, we are expanding our CI portfolio to include Blocks, Racks and Appliances to create the most comprehensive converged platforms line-up in the industry. Last quarter, we introduced our new rack-scale hyperconverged platform, VxRack. We are encouraged by VxRack’s early wins and growing pipeline. The nascent but rapidly growing hyperconverged appliance market segment is an important area for us in 2016. For the last several months, we have partnered very closely with VMware to develop a new, next-generation hyperconverged appliance family that uniquely leverages technology from EMC, VMW and VCE and will change the game in this part of the converged infrastructure market. Stay tuned for an exciting joint EMC-VMW announcement in a few weeks’ time.

Software-Defined-Storage

In Software-Defined-Storage , our ViPR, Elastic Cloud Storage (ECS), and ScaleIO had a good year with both our service provider customers and with larger enterprises that are in transformation mode. We also released software-only versions of VNX and Isilon this past year, and will continue to strengthen our Software-Defined-Storage portfolio with new releases this year, including a virtual edition of Data Domain.

Enterprise Hybrid Cloud

While our products provide the building blocks for modern data center infrastructure, the truly transformative opportunities for enterprise customers come from our solutions, including “Enterprise Hybrid Cloud” and “Native Hybrid Cloud” and the “Business Data Lake” which help customers accelerate time-to-value for their IT transformation initiatives. When one of the largest Fortune 100 healthcare organizations was looking to transform their current IT systems, they selected our EMC Federation Enterprise Hybrid Cloud solution to help modernize and automate their current data centers. For the next phase in their IT transformation, they are working with our Federation business Pivotal Labs to embrace Agile Programming and are deploying Pivotal Cloud Foundry and Pivotal Big-Data Suite to build their next-generation applications and data fabrics.

Summary

We are very excited about everything we are bringing to market in 2016. We have significant new announcements in the first half of this year to further expand our storage and Converged Infrastructure portfolio. Our entire storage and Converged Infrastructure portfolio is built on the architectural pillars of the modern data center, namely: Flash, Scale-Out, Software Defined, Cloud Enabled and Trusted technologies. We are uniquely positioned to help our customers modernize and automate their data center infrastructures to set the foundation for their IT and business transformations. And we help drive our customers’ full IT and business transformation initiatives using the full power of our EMC Federation, including innovative capabilities from VMware, Virtustream, Pivotal and RSA, the Security Division of EMC.

Finally, our combination with DELL, which we anticipate to close in mid-2016, promises to change the enterprise IT landscape forever by creating an IT leader with an unmatched portfolio, scale and reach. I hope you will join me and Michael Dell at EMC World 2016, on May 2-5, in Las Vegas, to hear more about our exciting plans there.

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