Jun. 6, 2014, 6:40 PM
- Thanks to a 25% drop in high-end storage spend, external disk storage and total disk storage sales respectively fell 5.2% and 6.9% Y/Y in Q1, says IDC. Those figures contrast with Q4 growth rates of 2.4% and 1.3%.
- Market leader EMC, which depends heavily on its high-end Symmetrix line, saw its external share fall 110 bps Y/Y to 29.1%, and its total share fall 50 bps to 22.4%. EMC previously reported its high-end sales fell 22% in Q1; strong flash/scale-out storage sales partly offset the drop.
- NetApp's (NTAP) low high-end exposure allowed its shares to grow 30 bps and 50 bps to 15.1% and 11.7%, in spite of a 2.8% revenue drop. H-P's (HPQ) external share rose 40 bps to 8.8% (3PAR strength), but its total share fell 20 bps to 15.1% (server weakness).
- Things still look bleak for IBM, which reported a 23% Y/Y Q1 system storage revenue drop: Its external share fell 200 bps to 8.8%, and its total share 180 bps to 10.1%.
- The total disk share of non-top-5 vendors rose 370 bps to 28.8%. Chalk that up to both surging demand for cloud storage (getting cheaper by the quarter) running on commodity hardware, and solid momentum for flash/hybrid storage upstarts such as Nimble (NMBL), Pure Storage, and Nutanix.
- Hard drive/assembly suppliers: STX, WDC, HTCH
May 5, 2014, 5:55 PM
- In addition to announcing the DSSD acquisition, EMC has used the first day of its EMC World conference to unveil a slew of products aimed at the cloud infrastructure providers and flash/hybrid storage startups causing headaches for the company and other established array vendors.
- Among them is the Elastic Cloud Storage Appliance, a relatively low-cost solution that (via clustering) can support hyperscale data center architectures (beloved by the likes of Google, Amazon, and Facebook). EMC claims ECS can deliver a 9%-28% lower TCO for object storage deployments than Amazon/Google's public cloud solutions.
- EMC has also rolled out the second-gen version of its ViPR storage hardware/data management platform, which drew praise last year on account of its support for non-EMC platforms. ViPR now supports multiple sites and new data management services for commodity storage; the latter is made possible by recently-acquired ScaleIO.
- EMC, which already offers flash storage arrays (XtremIO) and PCIe server flash modules (XtremSF), argues DSSD's flash storage architecture is superior for I/O-intensive in-memory database and big data workloads (a fast-growing market segment). The secretive startup is backed by Sun Microsystems co-founder Andy Bechtolsheim.
- Last year's EMC World announcements
May 5, 2014, 1:19 PM| Comment!
Apr. 23, 2014, 9:32 AM
- Following a Q1 revenue beat, EMC has slightly upped its full-year revenue guidance to $24.575B from a prior $24.5B. But EPS guidance has been lowered by $0.05 to $1.90. The consensus is at $24.51B and $1.94.
- After rising 11% Y/Y in Q4, product revenue fell 3% in Q1 to $3.01B. Services revenue (driven by product revenue) rose 9% to $2.47B, after growing 10% in Q4.
- EMC's core Information Storage ops (67% of revenue) saw sales fall 3% Y/Y (product sales -7%) after growing 10% in Q4, thanks largely to a 22% drop in high-end storage sales (a high-margin business) to $940M. Unified storage and backup/recovery sales +4% to $1.44B, other storage -12% to $830M.
- Emerging Storage (inc. Atmos, Isilon, and flash storage) remains a bright spot, with sales growing 81% to $81% to $470M. RSA Security +5% to $244M, Pivotal (still waiting for its IPO) +41% to $49M.
- North American sales were flat at $2.99B, and EMEA grew 8% to $1.59B. But Asia-Pac fell 2% to $720M, and Latin America 11% to $180M.
- Gross margin -30 bps Y/Y to 62.8%, higher SG&A spend contributed to a 270 bps drop in op. margin to 20.5%. $390M was spent on buybacks in Q1; EMC still expects to repurchase $2B worth of shares in 2014.
- EMC is off thanks to its EPS guidance cut and VMware's (VMW -6.8%) soft bookings. VMware blames delays in closing enterprise license agreements (ELAs) as it holds "deeper conversations" about expanded deals.
- Q1 results, PR, slides
Apr. 23, 2014, 7:00 AM
Apr. 23, 2014, 6:54 AM
Apr. 23, 2014, 12:05 AM| Comment!
Apr. 22, 2014, 6:15 PM
- Though VMware (VMW)'s license revenue rose 15% Y/Y in Q1 to $561M (beating guidance of $545M-$555M), the company disclosed on its CC license and total bookings growth was less than 10%, with sub-10% bookings growth in all three major geographies. Total bookings had risen at a mid-teens clip in Q4.
- Nonetheless, VMware is maintaining its prior forecasts for 2014 revenue of $5.94B-$6.1B (+14%-17%) and license revenue of $2.55B-$2.63B (+12%-16%). AirWatch is expected to contribute $100M.
- Q2 revenue, which assumes a $22M contribution from AirWatch, is expected to grow 15%-18% Y/Y to $1.425B-$1.465B (consensus is at $1.44B). License revenue is expected to grow 14%-16% to $605M-$615M.
- Some bright spots: End-user computing license bookings (PC virtualization, will include AirWatch going forward) rose 35%, and cloud management license bookings over 30%. Also, ~50% of VMware's costly enterprise license agreements (ELAs, 25% of bookings) included its far-reaching vCloud Suite.
- VMware's unearned revenue balance totaled $4.17B at the end of Q1, up 20% Y/Y. $169M was spent on buybacks.
- Parent EMC, which reports tomorrow morning, is following VMware lower.
- Q1 results, PR, CC slides
Apr. 22, 2014, 5:30 PM| Comment!
Apr. 16, 2014, 10:57 AM
- "The outlook for storage spending continues to look mediocre as users pause and consider their alternatives. Although there still may be a storage upgrade cycle coming, we don't see it in our recent survey work," writes UBS, explaining why it's downgrading NetApp (NTAP -3%) to Neutral. EMC (EMC -1.3%) investors also aren't crazy about the commentary.
- A recent Barclays CIO survey also indicated storage spend remains soft, albeit while painting a brighter picture for broader IT spending. IDC estimates external disk storage sales grew 2.4% Y/Y in Q4 after falling 5.6% in Q3, with EMC grabbing share from IBM and NetApp's share roughly holding steady.
- UBS is also worried about intensifying competition from storage startups and cloud infrastructure providers. Smaller vendors offering all-flash or hybrid flash/hard drive solutions - examples include newly-public Nimble Storage and private Tintri and Nutanix - have seen rapid growth. NetApp is hoping to counter them with its upcoming FlashRay systems.
- Cloud infrastructure giant Amazon Web Services has been growing rapidly as well, and rivals such as Microsoft and Google are doing their utmost to play catch-up. Amazon, Microsoft, and Google all recently announced huge price cuts for their cloud storage offerings.
- Amazon and Google's platforms run on white-label hardware, and Microsoft is reportedly thinking of going down the same path.
Apr. 9, 2014, 2:43 PM
- VMware's (VMW, EMC) new Horizon 6 platform integrates the company's existing PC and app virtualization offerings (they allow computing resources to be hosted/managed via servers). The company promises common management of apps and desktops, new monitoring/automation tools, and a unified workspace accessible through a single login.
- Horizon 6 is aimed squarely at PC virtualization leader Citrix's (CTXS +1.3%) XenDesktop and XenApp platforms; XenDesktop offers a measure of integrated desktop/app management. While Citrix is coming off a rough quarter, VMware saw its end-user computing license bookings rise nearly 30% in Q4.
- VMware exec Alistair Wildman asserts Horizon 6's storage virtualization support (through VMware's VSAN solution) puts virtual desktop operating costs on par with regular desktops. "For [virtual desktop] projects, storage is by far the biggest component, so if you can bring that down, you start to get more people interested in deploying them."
- Both VMware and Citrix investors were put on edge last fall when Amazon unveiled its low-cost/cloud-based WorkSpaces PC virtualization service. VMware and Citrix each offer cloud PC virtualization (DaaS) solutions via partners.
Mar. 13, 2014, 10:06 AM
- EMC's (EMC +1.8%) core Information Infrastructure ops (storage hardware/software, RSA) are "grossly undervalued" and chairman/CEO Joe Tucci will likely engineer a value-unlocking "structural change" before leaving in 2015, says Wunderlich's Kaushik Roy, while starting coverage at Buy.
- Roy thinks EMC is suffering from a "holding company" discount, and pegs the value of EMC and subsidiary VMware's (VMW +0.2%) Pivotal spinoff at $5B+. He also declares the company to be "evolving rapidly as technologies change" (previous), and predicts it can outgrow the broader IT sector.
- Separately, FBR's Daniel Ives has upped his VMware PT to $120 from $115, while stating checks have been "incrementally positive." Demand has been strong both from VMware's mainstay virtualization software, and for its software-defined data center initiatives.
- Ives also believes a strong ELA renewal cycle is helping VMware out, and that a broadening product set should strengthen the company's efforts to re-accelerate growth.
- Previous: EMC takes storage share in Q4
Mar. 7, 2014, 5:52 PM
- After falling 3.5% Y/Y in Q3, external disk storage system sales rose 2.4% in Q4, says IDC. The growth came even though sales of the servers that interact with these systems fell an estimated 4.4%.
- Total disk storage sales, which include storage subsystems found within servers, rose 1.3% in Q4 after dropping 5.6% in Q3. IDC attributes the turnaround to "traditional year-end budget flushes, improved economic sentiment, and a strong desire to address long-standing storage infrastructure inefficiencies."
- Market leader EMC, which posted strong Q4 numbers to go with light guidance, saw its external disk share rise 220 bps Y/Y to 32.9%, and its total disk share rise 200 bps to 25.8%. The gains largely came at the expense of restructuring IBM, whose shares respectively fell 190 bps and 200 bps to 13% and 14%.
- H-P's (HPQ) external disk share rose 30 bps to 9.6%, and its total disk share 40 bps to 16.3%. NetApp (NTAP), which delivered nearly in-line revenue and soft guidance last month, saw its external share fall 10 bps to 11.5%, and its total share stay flat at 9%. Private Dell's total share fell 140 bps to 9.9%.
- Hard drive/assembly suppliers: STX, WDC, HTCH
Feb. 25, 2014, 11:12 AM
- A day after posting an FQ2 beat, Palo Alto Networks (PANW -0.2%) has announced it's forming a new reseller deal with VMware (VMW, EMC), and that the companies have begun offering a solutions that meshes the former's virtualized next-gen firewall (runs on servers making use of virtualization software such as VMware's) with the latter's NSX network virtualization/SDN platform (announced last year)
- Palo Alto and VMware assert the solution, which also features management software and security services, allows for a single point of management for security services, policies, and threats. Earlier this month, Palo Alto expanded its partnership with Citrix to cover its virtualized firewalls.
- Palo Alto shares have largely shrugged off a valuation-driven downgrade to Hold from Gabelli today. The firm is upping its FY14 (ends in July) revenue estimate by $12M to $574M in response to the FQ2 report, but considers Palo Alto's fair value to be $70/share (7x FY15E EV/sales).
Feb. 14, 2014, 5:33 PM
- David Einhorn's Greenlight Capital established a 2.9M-share EMC position in Q4, as well as a 1.3M-share stake in SunEdison (SUNE) and a 4.2M-share stake in Take-Two (TTWO). At current levels, the positions are respectively worth $74M, $18M, and $80M.
- The Take-Two position translates into a 3.4% stake.
- Greenlight also discloses it owned 47.6M Micron (MU) shares at the end of Q4. That's up from the 23M shares it owned in late November, and is good for a 4% stake in the memory giant.
- Greenlight's Q4 13F
Feb. 10, 2014, 8:37 AM
EMC vs. ETF Alternatives
EMC Corp supports the businesses and service providers to transform information technology (IT) operations to an as a service model (ITaaS). It operates in three segments: EMC Information Infrastructure, Pivotal and VMware Virtual Infrastructure.
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