EMC Strikes Back With Symmetrix DMX

Within hours after launching its new high-end DMX subsystems, EMC President and CEO Joseph Tucci sat down with VARBusiness editors Sonia R. Lelii, David Strom and Editorial Director Robert DeMarzo.

VARBusiness: Is there anything in particular that customers are telling you that you want to pass along?

Tucci: I think customers are rooting for us. I think we got a little bit greedy. But I think customers liked us. They wanted our hand slapped a little bit, but now they are saying, 'Okay, now come back stronger than ever and do these things for us. We're pulling like crazy for you.' That's what I see. They tell me we were charging them excessive prices and they didn't like it. They thought they had to buy from us because nobody was even close. They still say, 'Nobody has service like you have and nobody has the range of products that you have.' Now that we're charging market prices and giving this extra performance, I think they're rooting for us. And that's good when you have customers rooting for you.

VARBusiness: You said during your (DMX launch) speech that you were hoping the DMX line is going to re-invigorate the high end. Why go after the high-end if there seems to be more opportunity in the mid-market right now?

Tucci: The high-end market last year was just under $5 billion. If you look at the installed base, we've got more than 50 percent. We're the king there. If we have 50 percent of that share, of terabytes and installed dollars, why would we turn our back on that?

We have a broad range of products (for the mid-market). We've got Centera, we've got Celerra. We've got Clariion. Right now, about 80 percent of Symmetrix goes through my direct sales force. With the channel, it's Centera and Clariion.

Overall, we do 40 percent of sales through our direct sales force. Over time, I expect about one-third to go through our direct sales force and two-thirds through the channel, as the channel starts to grow.

VARBusiness: Do you anticipate that customers are really going to jump start their high-end purchases this year?

Tucci: We know one of the things that happened over the last two years is utilization rates went way up. Therefore, we sold a lot of excess capacity in 1999 and 2000. With better software tools and networking, we've given customers the ability to utilize more of their storage. But applications still grow and there's a lot of applications out there that are very, very time sensitive. For instance, if you are a telco and you're doing billing, you've got to get that billing done (during a certain window of time) and it's incredibly complex. It's undoubtedly I/O bound. And if we can provide a system that's twice as fast-- that's huge money. That's cash flow. If you are a big telco company doing billing, I could close that window down for you. Ask a telco company what's that worth for them. A lot. And there's other companies like that, too.

VARBusiness: So you definitely see this as a business intelligence play.

Tucci: I see us doing both. One of the things I've tried to correct is that the company is not A or B. It's A and B. We can have different strategies, different product lines. It's a great sign that it's really kicking in for us. I hope that continues. I don't expect Clarion to slow down. I just expect Symmetrix to speed up. And I expect Centera to keep going like a rocket.

VARBusiness: Do you anticipate some channel conflict because DMX products do step on the Clariion a little bit?

Tucci: Well, you have a cost difference and you have a functionality difference. So if you don't mind the cost and you need the functionality, great. If you look at some of the big Internet Service Providers out there, I can tell you which ones use all Symmetrix and I could tell you which ones use all Clarion. I could show you an airline that is doing reservations on Clarion. I could show you an airline that's doing reservations on Symmetrix. It depends on what you want and what your business needs are.

VARBusiness: So what are you doing specifically to launch DMX that's really going to excite your partners and get them energized?

Tucci: I think DMX is going to excite more of the different kind of partner. I don't think it necessarily excites a Dell. I think it could excite a Unisys, for instance. I think it could excite Fujitsu. I think it could excite Accenture. It could excite EDS. That class of partner, the integrators. Our service partners--definitely. Our integration partners--definitely.

It's not going to upset Dell at all because one of the surprises of Dell relationship is we have exceeded what we thought we'd do with Symmetrix. We, as you know, put some cross-agreements in there and one of them says, 'Hey, if you come across a deal, let us know. We'll sell Symmetrix together and give you credit.' That's been successful. Do I think it's going to excite Dell? No. But it doesn't hurt it. The better our reputation gets, the better theirs gets. Dell is a powerful company and the only product they make that they put two name brands on is storage."