Until 2001, EMC owned about 75 percent of the top-end storage market according to
Although EMC has kept its edge in certain technologies, such as the critical area of storage management software, thanks to the more than $1 billion it spends on R&D each year, its rivals had caught up to its hardware technology – until the DMX launch.
“In the past, we had something to sell that nobody else did. The Symmetrix was the only game in town. The realisation that other companies can also operate in this market has inspired the company to become a more focused machine,” says EMC South Africa country manager Frank Touwen.
The DMX line offers 64 GB of system bandwidth, more than four times that of its closest competitor. Compared to the monolithic architecture of earlier Symmetrix systems, the product range now stretches across the mid- to top end market and offers a modular design that allows companies to buy storage piecemeal and stack it up, much like rack-mounted servers.
According to international reports, EMC is betting on aggressive price cuts as well as the new technology to regain market share. EMC, once known for its expensive boxes, should be able to pass on significant price savings to customers and still make money thanks to new efficiencies in manufacturing process.
The new product releases are but the latest in a series of steps EMC has taken in the past couple of years to boost falling revenues and take the fight to rivals [like HP] that are strong in the mid-market.
EMC has established close relationships with partners that are strong in the middle market, such as
Box droppers not welcome
In South Africa, too, market conditions have been tough, admits Touwen. The company has emerged from a long string of difficult quarters – as its customers felt the pinch from a devalued rand and held back from spending money on IT infrastructure. He reports, however, that the last quarter of 2002 showed some bounce, which can be attributed in part to the rand`s renewed strength.
The local office`s contribution to EMC`s bottom line has steadily fallen since the group entered South Africa six years ago because of the decline in the value of the rand.
EMC SA is now grouped with a clutch of other developing countries that report into the MEA sub-region of the commonly used EMEA division, a structure aimed at splitting out western Europe. This leaves eastern Europe, the Mediterranean and Africa with its own headquarters. Touwen says EMC nonetheless remains committed to the South African market and expects to see good growth in sectors such as financial services and telecoms.
EMC initially covered this market through a direct sales and support model, but it has over the past three years begun to develop a business partner network to meet black empowerment imperatives and in response to the growth of its mid-market business. But, like many of its peers, it has a clear message for the channel: it should add value to each transaction.
“I ask the customer: how would you like to deal with us? Most of them see a great deal of value in dealing with the maker of the equipment they buy. Customers would rather go straight to the vendor than deal with a partner who is just an order taker," says Touwen.
Telkom is EMC`s largest customer in South Africa, and most of the country`s larger blue chip companies also have at least a few terabytes worth of EMC storage in their data centres. EMC still handles most of these big customers directly, although it has committed to increasing the amount of business it does through the channel.
Not just a black face
EMC`s major business partners in South Africa include the likes of
“We work closely with these partners on skills transfer – we are building skills at grassroots level rather than putting a few black faces on the board,” Touwen says. “We`re an American company, so the focus on quarterly revenue is very visible. Head office really pushes us to deliver. Nonetheless, they are also determined to be a good corporate citizen in South Africa by meeting needs such as black empowerment and employment equity.”
Successful turnarounds are rare in the IT industry, but if analysts who say that EMC has stolen a march of 18 months over its rivals` technology are correct, the company could be staging the biggest comeback since
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