EMC Global Sales Chief Quits

Data storage giant EMC Corp. (NYSE: EMC) lost a key sales executive this week, in the wake of reports that other sales folk have recently jumped ship.

Michael Ruffolo, head of global sales and marketing, resigned Tuesday to join Akamai Technologies Inc. (Nasdaq: AKAM), which makes Web content delivery software.

Ruffolos departure follows rumors that several EMC sales folk have moved to archrival Hitachi Data Systems -- the new kid on the block that’s undercutting EMC on deals and generally giving the storage giant a run for its money.

“They [EMC] are accusing us of pinching their sales staff,” says Jodi Reinman, corporate communications manager at HDS. “We are not pinching them; they are just leaving.” Reinman was unable to confirm how many sales employees have left EMC to join HDS.

EMC had not returned calls regarding the resignations by press time.The sales kerfuffle comes at an inopportune time for EMC, considering the challenge it faces with HDS -- a challenge that's intensified by that company's recent alliance with Sun Microsystems Inc. (Nasdaq: SUNW) (see Sun Shines on Hitachi).

According to a Merrill Lynch & Co. Inc. research note issued today, the combination of Sun's and HDS's sales teams could threaten EMC in the field. Sun has 10,000 sales and systems support staff, 400 of whom are dedicated to storage. HDS has 600 direct sales employees. “Together they will be able to contest far more deals versus EMC than in the past,” asserts Thomas Kraemer, storage analyst at Merrill Lynch.

With a sales force of at least 5,000 (according to various published reports), EMC isn't likely to back off from any competition Sun and HDS can muster. Still, the alliance will no doubt turn up the heat for EMC. And persistent rumors of staff defections could take a toll that isn't directly related to EMC's actual headcount.

Indeed, competitors don't hold fire on the topic. "EMC has been bleeding staff for a while,” says a spokesperson for competitor Network Appliance Inc. (Nasdaq: NTAP). “Many come to us, but EMC puts the fear of God in its employees who are considering leaving." According to this source, EMC's tactics include issuing search warrants for employees' hard drives and pursuing defectors with lawsuits (see EMC Sues Over Secrets).

EMC's weathered other high-profile staff losses. One of the biggest came when the previous head of global sales, Peter Bell, left several years ago to found StorageNetworks Inc. (Nasdaq: STOR). He played a key role in building and managing EMC's Open Storage Group, which subsequently became a major growth driver for the company.Analysts say EMC didn't take Bell's departure lightly. Now, Ruffolo's exit has tongues wagging. “Ruffolo has a good pedigree, but never did fit the EMC culture. No harm there, very few outsiders have ever been successful up the ranks at EMC,” says Steve Duplessie, analyst with Enterprise Storage Group Inc.

Ruffolo has been named executive VP at Akamai and will be reporting to CEO George Conrades. Prior to joining EMC in 1998, he was president of the document solutions group at Xerox.

— Jo Maitland, Senior Editor, Byte and Switch http://www.byteandswitch.com

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