"Through its sheer size and dominance in the market, EMC will do well in this new sector as the global economy picks up," says Laura Conigliaro, analyst with Goldman Sachs & Co.
Despite current overseas economic weakness, EMC sees a strong future in global expansion. CEO Joe Tucci noted that overseas business has increased from 34 percent to 43 percent of total revenues over the last 18 months.
But rivals entrenchment in foreign markets will be hard to overcome. EMC has never had huge overseas markets, says Porter. IBM has sales in every place in the world where people know what a computer is.
In after-market hours, EMC was trading on Island at $18.90 a share, even below its 52-week low of $20.10. As EMCs stock price sinks into the mire, some analysts see this as a buying opportunity for a leading company thats struggling through some temporary hard times. Shebly Seyrafi, an analyst with A.G. Edwards, doesnt expect the storage market to get any worse: I see a bottom in Q3, a pickup in Q4, and a meaningful turnaround in 2002. Seyrafi, who rates EMC a Buy, expects 17 percent annual earnings growth for the storage industry over the next several years, and he thinks EMC will top that with around 30 percent growth.
Porter also sees growth picking up significantly next year as he expects information technology will lead the economic recovery. Its hard to be a pessimist long-term in this business, he says.