EMC: Flash Chips Poised To Revolutionize Storage

While analysts at Sanford Bernstein were busy downgrading the stock of storage equipment maker EMC (EMC), EMC chairman and chief executive Joe Tucci was the lunch keynote speaker at the JP Morgan conference this afternoon. Tucci didn’t say anything from a financial perspective that would address Bernstein’s concerns, but he painted a rosy picture of the surging demand for data. And he said flash memory chips are poised to revolutionize his business.

He started off by talking about where growth in information is at in the post-Bubble era: Data was growing at north of 100% annually in 2000, he noted, then dipped drastically, and is now back at a 60% per annum rate in the last couple years.

The most interesting part was when Tucci mentioned using flash memory chips instead of disk drives, which he said would fundamentally change the storage business in coming years. (Flash memory maker SanDisk’s (SNDK) chief executive Eli Harari said much the same in his talk yesterday.)

“The benefits are incredible,” he said. “The speed advantage is phenomenal” versus disk drives, “and it’s much more efficient and reliable, and as the price drops, with multi-level flash chip technology, it will revolutionize this industry. That’s how we’re going to build storage arrays.”

With flash technology, you can have big data caches for big SATA drives, fundamentally changing the way the company builds disk arrays, he said.

Before you get too excited about flash chip makers, however, Tucci did mention that there are some other kinds of chips that are interesting alternatives to flash as a technology for solid-state drives. “We don’t care what the substrate is, and we’re looking at all these different technologies, but at the moment, flash is the technology.”

Tucci mentioned the importance of the mushrooming of so-called unstructured data — movies, conversations in email or instant messaging, photographs — that don’t fit naturally in traditional database systems. EMC bears the responsibility of applying “metadata,” to make sure that data is properly organized on disk.

Tucci mentioned the company’s 86% ownership of software maker VMWare (VMW). “We intend to keep that 86% share,” he said — just in case you were wondering when he’d sell! VMWare will present at the conference tomorrow.

Why did the company buy consumer disk-drive-dinosaur Iomega (IOM)? Well, Tucci threw up a slide saying that while 70% of data is being created by individuals, 85% of data — that very same data — has to be managed by institutions. So, there’s an opportunity for EMC to expand into “cloud computing,” where EMC manages data for the customer on their behalf.

He mentioned that the company’s Mozy service has 600,000 users currently. Iomega will add to the technology for such services, he said. EMC us starting to bring Mozy to Europe and Asia.