EMC Makes Good on DMX-3

While wrapping up 2005 financial results today, EMC CEO Joe Tucci previewed his companys first major product rollout of this year: new DMX-3 Symmetrix systems, cheaper Fibre Channel, and Rainfinity file virtualization. (See EMC Reports Earnings .)

While EMC's official product launch is scheduled for Thursday, Tucci gave enough clues today to confirm what industry insiders have been speculating. EMC will make available larger capacity versions of its enterprise DMX-3 systems and low-cost Fibre Channel drives that it promised when the DMX-3 was launched last July. (See EMC Swells Its High End.) Back then, EMC claimed it would have a system early this year with 1,920 disk drives -- twice as many as it supported upon launch.

Last July, EMC also said the DMX-3 would eventually support Fibre Channel drives from Seagate that cost similar to SATA with performance somewhere between SATA and Fibre Channel. These are similar to the drives that Hewlett-Packard calls Fibre Attached Technology Adapted (FATA). (See Mixed Drives in the Mix and HP Ships Fatter FATA Drives.)

On today’s call, Tucci explained that Thursday’s introduction would include “new lower-end members of the DMX family as well as higher-end extensions” and “high-capacity, low-cost Fibre Channel drives.”

According to Tucci, the DMX-3 was a big seller last quarter. It accounted for one-third of Symmetrix sales and helped Symmetrix revenue jump 19 percent over the previous quarter.He then touted new products from Rainfinity, the file virtualization startup that EMC acquired for $90 million last August. (See EMC to Buy Rainfinity.) Tucci expects Rainfinity technology to play a major role in EMC’s three-legged virtualization strategy. He has high hopes for VMware software for sever virtualization and the Invista appliance for block storage virtualization.

One place EMC will not go Thursday is to 4-Gbit/s connectivity for its Symmetrix or Clariion midrange systems. IBM and Hitachi Data Systems are selling 4-Gbit/s, and sources say HP will roll out 4-Gbit/s Enterprise Virtual Array (EVA) midrange systems as early as next week. However, EMC still maintains that the market is not ready for 4-Gbit/s connectivity because key components such as hard drives are still available only at 2 Gbit/s. No EMC executives even mentioned 4-Gbit/s technology on today’s call.

EMC’s financial numbers offer no surprises. It’s fourth-quarter revenue of $2.71 billion and $0.17 earnings per share and full-year revenue of $9.66 billion and $0.53 EPS were in line with a forecast EMC gave on Jan. 6. (See EMC Brags on Revs, Plans Cuts.)

Tucci also made mention of the 1,000 job cuts announced on Jan. 6. (See Resolved: A Slimmer EMC.) The cuts are necessary, he said, after EMC gained 4,000 employees from 12 companies acquired over the last three years, and hired 5,000 more. He expects EMC to finish 2006 with more employees than it started the year with.

“This is not a layoff, it’s a rebalancing,” Tucci began, sticking to the term he used three weeks ago. “As we eliminate, we will hire immediately. This is about getting some of the bloat out of middle management and getting some of the under-achievers out of the company. When you hire fast -- you can’t bat 1.000.”— Dave Raffo, Senior Editor, Byte and Switch

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