UPDATED: EMC Forms New Software UnitUPDATED: EMC Forms New Software Unit

The tail end of New York's first muggy heat wave of the summer couldn't dampen EMC Corp.'s annual analyst briefing at the Equitable Center. Joe Tucci, EMC's president and CEO, predicted a positive future for his storage firm, and his lieutenants followed with a wave of new products, organizational moves, and strategies.

EMC expects 2004 revenue of $8.1 billion, 30% higher than last year's total. Tucci also predicted that profit would be $850 million, a 70% increase over 2003. He said that software and services accounted for 52% of all sales last quarter, which he compared with the first quarter of 2001, when hardware sales accounted for 73% of all EMC sales. Finally, Tucci introduced the $1.5 billion EMC Software division, with its own profit and loss responsibilities. The unit is a combination of past acquisitions of Documentum and Legato, and is headed by Dave Dewalt and Mark Lewis.

"Before, all our software only ran on [high-end] Symmetrix hardware," Tucci told the audience, "and it didn't even run on our [midrange] Clariion line."

Highlights among presentations from Tucci's division heads included virtual infrastructure, storage-aware content-management, and enhanced replication products to come. Thanks to work between acquired VMware engineers and EMC software engineers, the vendor plans by next year to help customers virtualize servers, networks, and storage from the same interface, and gain the ability to remotely manage hardware when necessary.

In the same time frame, storage-aware content management, with synergy between EMC and Documentum engineers, is planned to move unstructured data-object documents to a breadth of storage options, based on conditions set beforehand by customers. The enhanced Symmetrix Remote Data Facility replication capabilities, expected next January, include the ability to mix and match multiple systems at the end of the replication, and the ability to mix synchronous communications for real-time mirroring and asynchronous communications for long-distance business continuity.

An industry analyst thought the clear message of the day was that EMC wants to be a software vendor. Says Jamie Greuner, an analyst at IT research firm The Yankee Group, "EMC has to make the software business profitable because storage-hardware gross margins will continue to shrink."