Storage giant EMC is better known among large enterprises for its leadership in storage. In a bid to extend its reach into the small and medium-sized business (SMB) space, the company has partnered Dell Computer to tap into the SMB market, and to "under-promise and over-deliver" says Joel Schwartz, general manager of EMC's midrange systems division.
In recent years, EMC has moved into new areas after several acquisitions to enhance its product breadth, such as Documentum for content management and Allocity for simplified storage area network administration. Lately, it has began putting pieces of its technology together for a grand strategy called information lifecycle management (ILM)--essentially a way to prioritize information based on its changing value to businesses.
In an interview with ZDNet Asia, Schwartz outlined the company's product strategy, and what it takes to sell to SMBs effectively. He also spoke on the challenges of ILM and the company's future directions.
Q: We've seen a couple of mergers and acquisitions in recent years. Inevitably, this means customers have fewer vendors to choose from. What are your thoughts here?
A: If I could relate this to EMC, one of the reasons we've been acquiring companies for the last few years is to fulfill our ILM strategy. We recognize that although we spend more money on storage than any of our competitors, there are many pieces of ILM that we just can't do ourselves in a timely fashion.
Most customers would prefer to deal with fewer vendors, not one, because they certainly do not want to deal with just one vendor that have a proprietary view of the business. But dealing with a smaller number of vendors to solve a growing set of storage problems is something that most customers would want.
Your mid-range products are doing better than your high-end Symmetrix arrays. Are you cannibalizing yourself?
The market determines what needs are satisfied by what products. It is EMC's strategy to offer a broad range (of products) within the ILM framework at different capabilities and prices. Customers look at all their requirements and decide which ones need the highest performance solutions, and which ones can be tiered down to other forms of storage at lower prices.
Five years ago, EMC only offered one product so by definition, everything was top-tier. People didn't even talk about mid-tier in those days. But as a result of the technology bubble, the idea of tiered products at different levels of storage came into play.
Within that context, our strategy is to go to customers and ask them about their requirements before recommending the appropriate storage to satisfy their needs.
Any chance of merging the Clariion and Symmetrix lines?
It's not too likely. Each product line has a relatively similar architectural model, but at the same time, we also try to share technology whenever possible. For example, there are hardware elements of the Symmetrix line that are engineered into Clariion. Similarly, the software developed for Symmetrix has been shared in Clariion products.
Where do you see EMC's relationship with Dell heading in the near future?
For starters, the Dell relationship is one of the truly unique ones in the industry. Big deals of this nature fall apart after two to three years. For some reason, because of external changes, two companies may find themselves fighting over small issues that can turn into large ones.
We signed an agreement with Dell in 2001, and started working together in 2002. EMC's current run-rate is half a billion (U.S.) dollars per year--that is very remarkable. Whether you talk to the Dell or our people, they'll say the relationship is growing. As EMC (continues to) offer more capabilities and buy more companies, Dell will have the opportunity to sell more products.
We listen to Dell's needs a lot, particularly since they have a very strong focus on small and medium-sized businesses (SMB). They've been in that sector much longer than we have. As a result of listening to them, we get a better understanding of a particular technology that could be useful (for SMBs). Then, we'll make a decision to see if we can develop that, or see if there's a company that offers it in the marketplace. For example, we recently acquired Allocity that had a software product which allows (Microsoft) Exchange administrators in SMBs to manage their storage without understanding any of the underlying technologies in the storage (hardware). We and Dell felt this would expand the market for network storage in the Exchange environment.
According to a recent Gartner report, one of the seven mistakes that vendors make when selling to SMBs is over-promising and under-delivering. What are your views?
That's a common mistake vendors make regardless of the kind of company (you are selling to). We're trying to establish our reputation in the SMB market since it's a new market for us. I would say we're trying to be extra cautious. We would rather under-promise and over-deliver because we want to build the same reputation in the SMB market that we built in the large enterprise market.
Having built up some level of trust among SMBs, do you believe that if you build the products, they will come?
I think that's true across the board. We would like to achieve a point in the marketplace such that when someone has a (business) need that we can satisfy, they'll call on us before we can call on them--that's the ideal world for a vendor.
It's an opportunity for us in the SMB space since we don't have the presence there. Our name is not as well-known because people in that market haven't thought about storage as a separate entity as much as people in the (large) enterprises. This is a challenge, and we are going to work real hard to achieve that objective.
Some analysts have commented that ILM's marketing has failed to describe the breadth of EMC's portfolio and initiatives. Do you agree?
I would accept that. I think fulfilling the marketing vision of ILM along with our products is not the easiest thing to do. We have clearly established ourselves as the company driving this ILM vision in the marketplace. But because it involves so many different products and elements, it is often hard to explain to either the analysts or customers.
The ILM concept has not resonated with content management buyers. Will this hurt the Documentum brand?
I think bringing in content management is probably one of the newest elements of the ILM strategy. Documentum has been a part of EMC for several years, and I think it has really flourished.
A study revealed that some current and potential content management customers are concerned about EMC's long-term commitment to Documentum, because it represents a small portion of the company's overall revenue. How can you ease their worries?
I'll ease their worries by comparing with Clariion, which makes up a small percentage of EMC when it was first acquired in 2000. Today, it is more than three times larger and has achieved very high growth. We've invested a large amount of money in R&D activities and I don’t see any reason why Documentum will be treated any differently.
Since your days at Data General, how have the storage needs of SMBs evolved over the years?
I think three to five years ago, SMBs did not look at storage as a separate element from their computers. They looked at it as being integrated (within their networks). The amount of information has doubled every year in large and small companies. With the introduction of IP network-based storage, small companies have the opportunity to take advantage of the same benefits that network storage provides to large companies. As a result, it's a much more interesting proposition for them today.
As the market leader in storage, how do you stay ahead of the pack?
We do so by listening to our customers. We have a huge range of customers, and the problems are common among them. Staying close to them and listening to the problems they have today and in future, has allowed us to create new markets. For example, we created the market for remote replication and backup-to-disk (from customer feedback).
You guys just came up with a storage virtualization product, the EMC Invista. Was there a lot of hair-pulling in the process?
Complex products are hard to do, and they take a long time (to develop). The virtualization concept and terminology were out in the market. Other people were talking about it but not delivering it. People kept saying "EMC, when are you going to deliver something?" We got tremendous press coverage (on Invista), and this virtualization product is going to help enterprises.