In this regard, EMC may be reaping what it has sown. The storage vendor is "guilty of the largest over-provisioning in history," charges Steven Murphy, president and CEO of Fujitsu Software Technology Corp. (Softek), in our recent interview with him. Regardless of whether a storage glut does or does not exist, sales of storage subsystems inevitably will start to go up instead of down.
What about concerns that disk is becoming a commodity and margins are eroding? Yes, of course this is happening. But companies are still going to pay a healthy premium to make sure their most critical information is stored on fast, reliable media and low-cost storage technologies like Serial ATA will not be ready for the data center for at least two years or more.
The preliminary results of Byte and Switch's survey of storage buyers show that the two top purchasing criteria are performance and high availability. Storage can't go down, and it can't be slow. (We'll be presenting the full results of the survey in a live Webinar on Oct. 22; click here for more information.) And remember that at the lower end of the market, EMC has a very strong partner in Dell Computer Corp. (Nasdaq: DELL).
Once storage spending comes back, EMC will still be the leading provider of networked storage systems. True, it doesn't have an unassailable market position. In fact, according to IDC, Hewlett-Packard Co. (NYSE: HPQ) recently overtook EMC as the overall market share leader in external storage, although this was through brute force (i.e., acquiring Compaq see HP Tops Storage Charts, IDC Says).
I'm not saying EMC hasn't been cut down to size. Obviously, it has (and will continue to be as another 1,350 staffers get pink slips). But that doesn't mean it's dying. Long term, EMC does have a viable even, perhaps, rosy future as the company best positioned to capitalize on the steadily growing need for disk, as well as the transition from direct- to network-attached storage.
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