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EMC's Tucci changes mind, to stay on as CEO into 2013

Announces change on same day that EMC reports 2011 sales rose to $20B-plus

January 24, 2012 12:57 PM ET

Computerworld - During an earnings call Tuesday, EMC CEO Joe Tucci said he would honor a request from EMC's board and remain chairman and CEO into 2013.

Tucci this morning also reiterated that his eventual replacement as CEO will come from EMC's senior management team.

"After much soul-searching, I have agreed to extend my role as chairman and CEO into 2013," Tucci said. "I've started to increase the responsibilities of my senior team. When the time is right, my successor will be named."

Tucci last fall had disclosed plans to step down as CEO at the end of this year, and to continue to serve as chairman of its board through 2016.

EMC today also announced that fourth quarter sales grew 17% to $5.6 billion and that revenue for all of 2011 increased by 18% to $20 billion.

Fourth quarter earnings increased by 32% to $832 million. EMC said its full year net income was $2.5 billion, up 30% from 2010.

During the earnings call, Tucci credited the company's increasing focus on cloud computing for the strong results.

"There's no doubt that cloud computing is completely transforming the IT industry and that Big Data promises to have a similarly profound effect on transforming the way we work and live," Tucci said.

David Goulden, EMC's chief financial officer, said he expects the company "to achieve 2012 consolidated revenue of $22 billion." Goulden went on to say he expects the company to achieve $28 billion in revenue in 2014, "which represents a compound annual revenue growth of at least 13% from 2010.

This is truly a transformational time. IT is transforming to more efficient and agile cloud models. Businesses will be transformed by Big Data, and EMC continues to transform its business to capitalize on these trends," Goulden said.

The company also expects to repurchase $700 million worth of its common stock in 2012, he added.

Tucci has said in the past that EMC's would be focusing its efforts on hybrid cloud computing, which includes both public cloud and private cloud infrastructures, as well as Big Data analytics.

In 2010, EMC purchased Greenplum, the maker of a Hadoop database appliance.

For 2011, EMC generated operating cash flow of $5.7 billion and free cash flow of $4.4 billion, increases of 25% and 29% year over year, respectively.

In 2011, EMC reported $10.8 billion in cash and investments.

Leading EMC's revenue growth was its server hypervisor product: VMware. The division reported a 27% year-over-year revenue increase or about $1.1 billion. VMware's gains were followed by EMC's mid-tier storage division, which includes its Clariion arrays, with 24% revenue growth and the company's Symmetrix storage systems division reporting 12% sales growth.

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