EMC's Tucci Takes Blame For Bad QuarterEMC's Tucci Takes Blame For Bad Quarter

Poor planning for the transition of its high-end systems is to blame for EMC's drop in second quarter earnings, according to the company's president and CEO.

As a result, EMC ended up with excess inventory of its older Symmetrix DMX-2 systems and a shortfall on the newer DMX-3, Tucci told investors on Friday's earnings call.

"We played it too tight with our supply chain," he said. "We need to have ample components to build out systems."

While revenue of $2.5 billion for the quarter was up, profits of $279 million were down. EMC also revised downward its revenue for the year from $11.1 billion to $10.8 billion.

Tucci attributed the Q2 shortfall to an execution problem and not a shift in overall IT spending.

"I am deeply disappointed with our performance this past quarter," he said. "Our overall execution was clearly not up to EMC standards. We can and will do better."

Much of EMC's DMX business, however, is direct, and Tucci did offer on the call that he sees more of EMC's sales in the future going through the indirect channel, particularly as more of its revenue comes from small and midsize businesses.

"This is a clear, 100 percent indirect sell," Tucci said of the SMB segment.

In the SMB sector, the company has had a lot of success with its new Clariion AX150, released earlier this year and priced at $5,600 for an entry-level, 750-GB system. Tucci said to expect to see products that are both lower end and slightly higher end.

"I guarantee you there's a bigger brother coming for the AX150," he said. "To really get the potential with what this SMB market can do, and I do think that's the fastest-growing part of the market, we need a product family, and that's coming. We are not executing there on all cylinders."