The NWC Interview: EMC's Mark Lewis

EMC bolted past the $10 billion mark in 2006 and has been growing in the mid-teens on a percentage basis. Is information management as hot an area as those numbers would suggest?

Definitely. Information stored on electronic media has been growing 60 percent to 70 percent over the past decade. We've been able to grow because of the information needs that our customers have, as well as through taking share and moving into new markets.

Let's not overlook the part that acquisitions have played. You've bought 23 companies in the past three years.

We've biased our growth strategy toward acquisitions because we felt we needed to redefine our value proposition to customers. We believed that was done most effectively through acquisition.We've acquired on four threads that we felt were critical: Virtual and flexible infrastructures; information and content management; IT orchestration, which is really helping manage all of the cross domains that you have in your IT environment; and information-centric security. Our $2.1 billion RSA deal was about that.

Is all this acquisition activity a sign that you've lost the ability to innovate internally?

It's exactly the opposite. Our internal innovation machine, within the products we sell today, is the strongest it has ever been. Most of our acquisitions have been market extensions, not buyouts of competitors.

>What impact do you think 10 Gigabit Ethernet will have on the storage industry?

In some ways nothing; in some ways everything. Obviously as networks get faster and faster, it drives a couple of key things. One is it becomes easier to use a common network because the performance is so high that you simply have enough overhead to deal with the inherent arbitration performance issues that have existed in more generic networks. You begin to overcome those.

The second thing that happens with speed is that we can do more wide-area data sharing from centralized sources. So we expect to see continued growth there with higher bandwidth rates, allowing more core central storage to exist, and service that storage to more individuals at the edge.The possibility of centralized storage is something that Google has brought to the attention of consumers. Is Google a threat to you?

There's a very large constituency of customers and business owners that like the idea of storage as a service, but really require something that is private and secure. With our acquisition of RSA and with the pieces we've put together, our effort will not be on the public Web, à la Google. Our effort is focused on the private Web.

Most of our customers are IT infrastructure consumers themselves, and most of them want to allocate and provision storage out as a service to their customers, which are the individual businesses within their organizations. We do that today, and we're continuing to work to extend that philosophy.

OK, here's my Pac-Man question. We've said a lot here about your acquisitions. What about the possibility that someone may turn around and gobble you up? A recent magazine article cited EMC as a prime LBO candidate.

There are always possibilities of things happening. But our focus remains to do the best job that we can growing earnings for our shareholders, being relevant to our customers and doing well by our employees. These other things just kind of run their course. n0