EMC reports strong Q3 revenue, profit growth

'Uncertain' economy could affect upcoming quarters -- but only slightly, says CFO

EMC today reported $4.98 billion in third quarter sales, up 18% over the year-earlier period.

Profit rose 28% to $606 million from $473 million last year.

EMC Chief Financial Officer David Goulden told analysts today that EMC's focus on cloud and big data analytics is a key reason for the solid growth in the quarter.

Revenue from EMC's portfolio of big data products, which includes Isilon clustered network-attached storage (NAS), Atmos cloud storage software and Greenplum Hadoop Data Computing Appliance, more than doubled from the third 2010 quarter, the company said.

The company has about $9.3 billion in cash reserves and investments.

Goulden cautioned that "uncertainty" in the global macroeconomic environment may affect future earnings -- but only slightly.

"We remain on track to exceed $19.8 billion in revenue [this year]," Goulden said. "Our sharp focus on key areas of opportunity within cloud and big data is propelling ongoing momentum."

Without providing specifics, EMC CEO Joe Tucci echoed Goulden's sentiments, but added that he expects cuts in government sector spending. "I'm still convinced when all the smoke clears ... you will see 5 to 7% growth this year. So next year, all we're planning for is that it will slow down somewhat," Tucci said in the conference call.

EMC said sales of its midrange VNX array line, which offers both block-level storage area network (SAN) and network-attached storage (NAS) capabilities in the same box, were also strong in the quarter.

Over 80% of new system revenue came from the VNX family of arrays. EMC has added 1,300 new VNX customers since the product was launched in March, Goulden said. Tucci noted that the VNX sales growth came from "non-Dell channels".

Dell announced yesterday that it has ended a 10-year reseller relationship with EMC. Competition among the two companies has increased in recent years.

Tucci did not address the break-up with Dell in this morning's call.

EMC reported 7% year-over-year growth for in its high-end Symmetrix storage product line, and 28% growth in its mid-tier storage products,, which include the VNX and Scale-Out NAS (SONAS) product lines.

Revenue from EMC's VMware subsidiary shot up 32% for a total of $932 million, and revenue from EMC's RSA Information Security business grew 16%, though EMC did not disclose the amount of sales.

EMC has grown its global workforce to about 52,000 employees, Tucci said.

According to market research firm IDC, EMC as of last quarter had maintained its lead in the external disk storage systems market with 28.7% revenue share, followed by IBM and NetApp tied, which were for second with 13.7% and 12.8%. respectively. HP ended the quarter in fourth position, with 11.0%. Hitachi and Dell finished in a tie for fifth with 8.1% and 7.9% market share respectively.

Lucas Mearian covers storage, disaster recovery and business continuity, financial services infrastructure and health care IT for Computerworld. Follow Lucas on Twitter at @lucasmearian, or subscribe to Lucas's RSS feed . His e-mail address is lmearian@computerworld.com.

Copyright © 2011 IDG Communications, Inc.

  
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