EMC

EMC Corporation

EMC Corporation develops, delivers and supports the Information Technology (“IT”) industry’s broadest range of information infrastructure and virtual infrastructure technologies and solutions. Throughout this report, we refer to EMC Corporation, together with its subsidiaries, as “EMC”, “we”, “us”, or “the Company.”

EMC’s Information Infrastructure business provides a foundation for customers to manage and secure their vast and ever-increasing quantities of information, automate their data center operations, reduce power and cooling costs, and leverage critical information for business agility and competitive advantage. In addition to providing systems, software and solutions for customers’ traditional data center infrastructures, EMC is also pursuing a cloud computing strategy that supports customers ranging from service providers, to large enterprise customers to individual consumers with this next-generation model of computing.

EMC’s VMware Virtual Infrastructure business, which is represented by EMC’s majority equity stake in VMware, Inc. (“VMware”), is the leading provider of virtual infrastructure software solutions from the desktop to the data center and to the cloud. VMware’s virtual infrastructure software solutions run on industry-standard desktop computers and servers and support a wide range of operating system and application environments, as well as networking and storage infrastructures.

EMC was incorporated in Massachusetts in 1979. Our corporate headquarters are located at 176 South Street, Hopkinton, Massachusetts.

Products and Offerings

EMC operates in two businesses, EMC’s Information Infrastructure business and the VMware Virtual Infrastructure business.

EMC Information Infrastructure Strategy

EMC’s Information Infrastructure business helps customers store, protect and maximize the value of their vast and ever-increasing quantities of information. EMC’s strategic guidance, technology expertise and wide variety of high-performance and high-availability storage, security, content management and archiving systems, software and services help customers capture and manage information to improve business agility, lower cost of ownership and enhance their competitive advantage in their traditional data centers.

EMC is also poised for the next generation of IT known as cloud computing. Facing excessive IT complexity and relentlessly-growing information, many customers have had to spend roughly two-thirds of their IT budgets on maintaining their infrastructure and applications, and only about one-third of their IT budgets on advances that can make them more competitive. Cloud computing holds the promise of dramatically altering this ratio so that much more of their energy and investment can be directed toward real innovation.

In essence, cloud computing enables IT to be delivered as a cost-effective service, which will transform the way customers acquire and implement IT and the way they build and operate their data centers. EMC’s cloud strategy embraces virtualization, security, storage and other critical EMC technologies to enable customers to securely, efficiently and effectively extend the capabilities of their internal IT environments and maximize their computing power to manage, access and store their information in internal, public or federated private clouds.

Regardless of whether customers are expanding their traditional data centers or embracing a virtual data center or broader cloud computing models, EMC’s extensive portfolio of Information Infrastructure technologies and services provide the highest levels of efficiency, choice and control to support their organization.

EMC Information Infrastructure Business

EMC’s Information Infrastructure business comprises three segments – Information Storage, Content Management and Archiving and RSA Information Security.

Information Storage Segment

EMC offers a wide range of networked information storage systems and software to support customers’ information storage and management strategies. As the foundation of an information infrastructure, our storage systems can be deployed in storage area network (SAN), networked attached storage (NAS), unified storage combining NAS and SAN, content addressed storage and/or direct attached storage environments.

EMC’s information storage systems are designed to consume less energy per terabyte than alternative solutions. EMC’s advanced tools and services optimize energy efficiency in data centers by reducing energy demands, costs and outages caused by overburdened power grids. These systems include EMC Symmetrix and EMC CLARiiON information storage systems, EMC Celerra unified storage systems, EMC Centera content addressed storage and EMC Connectrix directors and switches. EMC continues to offer software to control and enable functions that take place within the EMC networked storage system, including local and remote replication, optimization and data movement, with products such as EMC SRDF (Symmetrix Remote Data Facility), EMC MirrorView, EMC TimeFinder, EMC SnapView and EMC Celerra Replicator.

In 2009, EMC introduced the EMC Virtual Matrix Architecture, which integrates industry-standard components with unique EMC Symmetrix capabilities to deliver massive scalability, enabling systems that scale to hundreds of thousands of terabytes of storage and tens of millions of IOPS (input/output per second) supporting hundreds of thousands of VMware and other virtual machines in a single federated storage infrastructure. EMC Symmetrix V-Max system, the first storage system based on this innovative new architecture, is a high-end storage array that helps customers cost-effectively meet the widest range of storage requirements for high performance and high capacity in a single system.

EMC introduced EMC FAST (fully automated storage tiering) technology in 2009 to automate the movement of data within a storage system to not only optimize its storage infrastructure for both highest performance and lowest cost, but to also replace hours or even days of repetitive, manual storage administrative tasks. EMC’s FAST technology serves as the foundation for integrating all of its leading storage efficiency and automation capabilities, allowing IT organizations to manage more information more efficiently in a smaller footprint, use less power and cooling, and lower storage capital and operational costs.

EMC also expanded its backup and recovery offerings through its acquisition of Data Domain, Inc. (“Data Domain”). Data Domain’s backup recovery solutions, along with the EMC Avamar, EMC NetWorker and EMC Disk Library products, provide a combination of data protection solutions to help customers contend with massive information growth, cost constraints, virtual infrastructure backup challenges and increasingly stringent service requirements for recovery of data.

In 2009, EMC introduced new enterprise backup capabilities for desktop and laptop computers, as part of the latest version of EMC Avamar software. Businesses and organizations of all sizes can now leverage the same innovative Avamar deduplication technology that protects data centers and remote offices to efficiently backup the information stored on corporate desktops and laptops. EMC also introduced its flagship inline deduplication storage system, the EMC Data Domain DD880, for large enterprises and data centers to address multiple petabytes of backup data and support fan-in replication from up to 180 remote sites.

EMC’s Cloud Computing Strategy and Offerings

EMC has built the foundation for its cloud computing strategy, which embraces virtualization, security, storage and other critical EMC technologies to enable customers to securely, efficiently and effectively manage, access and store their information in internal, public or federated private clouds with lower cost of ownership.

In 2009, EMC and Cisco Systems, Inc., together with VMware, formed the Virtual Computing Environment coalition to accelerate customers’ ability to increase business agility through greater IT infrastructure flexibility and lower IT, energy and real estate costs through pervasive data center virtualization and a transition to private cloud infrastructures. The Virtual Computing Environment coalition introduced Vblock Infrastructure packages – fully integrated, tested, validated and ready-to-go/ready-to-grow infrastructure packages that combine best-in-class virtualization, networking, computing, storage, security and management technologies from EMC, Cisco and VMware with end-to-end vendor accountability. To scale customer adoption of Vblock systems the Virtual Computing Environment coalition established a robust set of partners committed to the coalition, including systems integrators, value-added resellers, service providers and independent software vendors. These partners include Accenture, Capgemini, CSC, Lockheed Martin, Tata Consultancy Services and Wipro Technologies.

Additionally, EMC and Cisco introduced Acadia, a joint venture focused on accelerating customer build-outs of private cloud infrastructures through an end-to-end enablement of service providers and large enterprise customers. Acadia’s unique “build, operate, transfer” model for delivering the Vblock architecture and addressing people, process and technology, will offer customers further choice, flexibility and cost advantages as they seek to virtualize their IT infrastructures and evolve to private cloud environments.

EMC’s Cloud division builds cloud-based technologies for individual consumers and small businesses, as well as foundational infrastructure components upon which third-party service providers deliver cloud-based services. In 2009, EMC expanded the reach of its cloud offerings by offering its industry-leading Mozy online backup service through major distribution partners, including Vodafone, McAfee, China Telecom and Cox Communications. Mozy is the world’s most trusted online backup service for consumers and small businesses with more than 1,000,000 customers, 40,000 business users and 20 petabytes of information stored at its multiple data centers around the globe.

In addition to the EMC Atmos infrastructure platform for cloud-based information services, the EMC Atmos onLine service provides customers instant access to online storage resources so that they can reduce capital expenses and management overhead. The service delivers users the flexibility and cost efficiencies of on-demand, object storage, while providing the controls an enterprise requires, such as policy and retention.

EMC Consumer and Small Business Products

The EMC Consumer and Small Business Products division leverages Iomega’s strong brand, products, partner ecosystem and worldwide sales channels to target consumer and small business markets. This division includes EMC Retrospect and EMC LifeLine software, as well as Iomega-branded direct-attach portable and desktop hard drives, network drives (NAS devices) and HDD multimedia products. In 2009, the Consumer and Small Business Products division introduced several new additions to the Iomega NAS product family, including the award-winning desktop double drive StorCenter ix2-200 NAS and the quad-drive StorCenter ix4-200d NAS, both of which are VMware-certified for virtualization installations, which is a first for NAS devices in the SOHO and low-end small business category. Iomega’s NAS devices utilize EMC LifeLine software, a fully-developed Linux operating environment and suite of applications designed for cross-platform support with Windows, Mac and Linux computers.

EMC Global Services

EMC Global Services provides the strategic guidance and technology expertise organizations need to address their business and information infrastructure challenges, derive maximum value from their information assets and investments and help speed customers’ transition to the private cloud. With more than 14,000 professional- and support-service experts worldwide, plus a global network of alliances and partners, EMC Global Services leverages proven methodologies, industry best practices, experience and a knowledge base derived from EMC’s broad practices to help customers reduce risk, lower costs and speed time-to-value. End-to-end services capabilities address the full spectrum of customer needs across the information lifecycle: strategize, advise, design, implement, manage and support. Among the offerings provided by EMC Global Services are consulting services, technology deployment, managed services, customer support services, training and certification and EMC Proven solutions.

In 2009, EMC introduced a suite of more than 30 new services and solutions to speed customers’ transition to the private cloud. The comprehensive approach EMC takes to address the application, infrastructure and governance issues that impact execution of a private cloud strategy is reflected in the broad portfolio of end-to-end services and solutions that enable customers to accelerate enterprise-scale virtualization. The new services and solutions, encompassing consulting, technology integration, resident and education services offerings, along with a full suite of EMC Proven solutions, are critical to helping customers address the challenges they face when planning, implementing and scaling their private cloud environment, including challenges related to backup and recovery, business continuity, disaster recovery, management and the transition of tier 1 applications to the virtual infrastructure.

EMC Global Services was recognized for its customer support leadership and innovation, receiving the Service and Support Professional Association (SSPA) STAR Award for Best Practices, certification by the Service Capability and Performance (SCP) Support Standard for the tenth consecutive year, and the Association for Support Professionals (ASP) Ten Best Support Website Award. Global Services also received two Microsoft Partner of the Year Awards in 2009, making EMC Global Services a 20-time winner of this honor.

Content Management and Archiving Segment

Our content management and archiving software helps our customers get maximum leverage from their information by allowing them to create, manage, deliver and archive content ranging from documents and discussions to e-mail, web pages, images, XML, reports, records, rich media files and application data. This segment consists of three key product areas. The Information Governance products improve compliance, simplify e-discovery and reduce IT infrastructure costs and includes EMC SourceOne and Records Management solutions. Documentum xCP is an applications composition platform that provides fully integrated technologies, development and deployment tools as well as application accelerators enabling customers to rapidly build and deploy case processing solutions at a lower cost and with fewer resources. The Information Access products help securely connect information with people and consists of ApplicationXtender, Captiva, CenterStage, Document Sciences, Media Workspace and My Documentum.

RSA Information Security Segment

RSA, The Security Division of EMC, delivers products, packaged solutions and services designed to guard the integrity and confidentiality of information throughout its lifecycle, no matter where it moves, who accesses it or how it is used. RSA offers solutions in identity assurance and access control, data loss prevention, encryption and key management, compliance and security information management and fraud protection. These technologies enable EMC’s customers to discover, classify and place appropriate controls around their data, secure access to the data, both inside and outside the network, and monitor and enforce these measures to prove compliance with security policies and regulations.

In 2009, RSA introduced new versions of many of its products including RSA enVision, the RSA Data Loss Prevention (DLP) 7.0 Suite and the RSA Adaptive Authentication platform. RSA also launched the RSA Share Project, a new initiative designed to bring security tools within reach of corporate and independent software developers and project leaders. Additionally, RSA announced advanced information-centric security functions within VMware vSphere. RSA also integrated the RSA enVision security information and event management (SIEM) solution with the Cisco Mobility Services Engine (MSE) platform and teamed up with First Data, a global leader in electronic commerce and payment processing services, to provide a new service called First Data Secure Transaction Management to secure payment card data.

VMware Virtual Infrastructure Business

VMware is the leading provider of virtualization solutions from the desktop to the data center and to the cloud. Its virtualization solutions represent a pioneering approach to computing that separates application software from the underlying hardware to achieve significant improvements in efficiency, availability, flexibility and manageability. Its broad and proven suite of virtualization solutions addresses a range of complex IT problems that include cost and operational inefficiencies, business continuity, software lifecycle management and desktop management.

VMware solutions enable organizations to aggregate multiple servers, storage infrastructure and networks together into shared pools of capacity that can be allocated dynamically, securely and reliably to applications as needed, increasing hardware utilization and reducing spending. In the eleven years since the introduction of its first virtualization platform, VMware has expanded its product offerings to address distributed and heterogeneous infrastructure challenges such as planned and unplanned downtime management, system recoverability and reliability, backup and recovery, resource provisioning and management, capacity and performance management and security.

Markets and Distribution Channels

Markets

EMC provides information storage, content management and archiving, security and virtualization technologies to support customers’ information and virtual infrastructures. We target organizations of all sizes.

Distribution Channels

We market our products through direct sales and through multiple distribution channels. We have a direct sales presence throughout North America, Latin America, Europe, the Middle East, South Africa and the Asia Pacific region. We also have agreements in place with many distributors, systems integrators, resellers and original equipment manufacturers (“OEMs”). These agreements, subject to certain terms and conditions, enable these companies to market and resell certain EMC systems, software and related services.

Additionally, VMware has developed a multi-channel distribution model to expand its presence and reach various segments of the industry. VMware derives a significant majority of its revenues from its large indirect sales channel that includes distributors, resellers, x86 system vendors and systems integrators.

Technology Alliances

We have technology alliances with leading software, networking and services companies. We intend to continue to form additional alliances. Our strategy is to work closely with these and other companies to provide added value to our customers by integrating our solutions with software and networking applications that customers rely on to manage their day-to-day business operations.

In 2009, we extended our strategic alliance with Microsoft Corp. through 2011. EMC and Microsoft have committed to broader and deeper product interoperability and service delivery to address key customer requirements, including virtualization, security and content management through the powerful combination of Microsoft’s data center solutions and productivity applications with EMC’s information infrastructure solutions and consultancy. This will enable joint customers to benefit from more productive and less costly dynamic IT infrastructures that can effectively respond to today’s rapidly changing business requirements and economic constraints.

In 2009, EMC and Cisco, together with VMware, formed the Virtual Computing Environment coalition to accelerate customers’ ability to increase business agility through greater IT infrastructure flexibility, and lower IT, energy and real estate costs through pervasive data center virtualization and a transition to private cloud infrastructures. EMC also expanded its partner ecosystem in international markets, strengthening existing relationships and forging new ones with global and regional technology and solutions providers.

VMware works closely with over 1,300 technology partners, including leading server, microprocessor, storage, networking and software vendors.

Research and Development

We continually enhance our existing products and develop new products to meet changing customer requirements. In 2009, 2008 and 2007, our research and development (“R&D”) expenses totaled $1,627.5 million, $1,721.3 million and $1,526.9 million, respectively. We support our R&D efforts through state-of-the-art development labs worldwide.

Employees

As of December 31, 2009, we had approximately 43,200 employees worldwide, of which approximately 7,100 were employed by or working on behalf of VMware. None of our domestic employees is represented by a labor union, and we have never suffered an interruption of business as a result of a labor dispute. We consider our relations with our employees to be good