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EMC Corporation (EMC)

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  • Oct. 28, 2014, 1:26 PM
    • EMC (EMC +0.5%) has acquired Maginatics, provider of a software platform built from the ground up to jointly manage public and private cloud storage. It has also acquired Spanning, provider of a data backup/recovery service for cloud business apps. Terms are undisclosed.
    • EMC touts Maginatics' ability to provide a global namespace (enabled by its Virtual Filer file system) for far-flung cloud storage resources, thereby simplifying data management and protection. Its platform also uses client software that optimize storage delivery based on device type.
    • "This would provide EMC with the industry’s most capable cloud and on-premise software defined storage platform," said industry analyst Ben Woo ahead of the deal (rumors existed). Woo added EMC could integrate Maginatics' offerings with its ViPR platform for managing on-premise storage.
    • The purchases follow the acquisitions of cloud infrastructure (IaaS) software firm Cloudscaling and cloud storage software firm TwinStrata, and mesh with a broader EMC effort to deliver storage platforms that work with both EMC and non-EMC hardware; the 2013 ScaleIO acquisition also fits with this goal.
    • In tandem with the acquisitions, EMC has unveiled its Enterprise Hybrid Cloud platform, which the storage giant claims can allow a hybrid cloud to be set up in 28 days.
    • The solution relies on several VMware (VMW +1.5%) products, including its virtualization, IT self-service, and cloud/data center management software. It also features EMC storage hardware (VMAX, VNX, Vblock, and Avamar) and software (ViPR, VPLEX), and integrates with VMware's vCloud AIR IaaS platform.
    • Microsoft is already a major player in the hybrid cloud software/services space (via Azure), and various supporters of the OpenStack IaaS platform (IBM, H-P, Cisco, Red Hat, etc.) have their own efforts underway.
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  • Oct. 22, 2014, 9:28 AM
    • Confirming yesterday's Bloomberg report, Cisco (NASDAQ:CSCO) and EMC state the latter will take control of the companies' VCE JV. Cisco's stake will be cut to 10% from 35%, VMware (currently has a sub-10% stake) will maintain an interest, and the business will be included in EMC's income statement after the deal closes in Q4.
    • The companies add VCE was on a $2B/year run rate for its Vblock converged server/storage/networking systems exiting Q3, and that the quarter was its sixth consecutive one of 50%+ Y/Y growth. VCE previously forecast 2014 sales of $1.8B. Gartner and IDC have ranked VCE the leader in a converged infrastructure market that also features Oracle, H-P, IBM, and Dell.
    • The Vblock like makes use of Cisco's servers and data center switches, EMC's storage systems, and VMware's virtualization and systems management software. Cisco, EMC, and VCE have "existing and renewed multi-year engineering, resell and support agreements" between them.
    • Nonetheless, Cisco's decision to cut its VCE stake could pave the way for it to directly compete against Vblock through its UCS server ops, particularly given the recent launch of the UCS Mini (less powerful than Vblock hardware, but also a converged system).
    • Separately, EMC has issued nearly in-line guidance to go with its its mixed Q3 results: The company expects 2014 revenue of $24.5B and EPS of $1.90 vs. a consensus of $24.54B and $1.91.
    • EMC +0.7% premarket. CSCO +0.3%.
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  • Oct. 21, 2014, 7:48 PM
    • Bloomberg reports EMC plans to announce tomorrow it's buying out much of Cisco's (NASDAQ:CSCO) stake in the companies' VCE JV, which sells high-end integrated server/storage/networking systems (the Vblock line). EMC owns 58% of VCE, and Cisco 35%.
    • The report shortly follows a statement from EMC that the company will be announcing a "new business development" tomorrow, to go with its Q3 report.
    • Taking a larger stake in VCE would allow EMC to recognize the fast-growing unit's sales in its quarterly results at a time when its standalone storage hardware sales remain pressured by high-end weakness. In May, VCE predicted its sales would rise 80% in 2014 to $1.8B.
    • Cisco stated in July it had invested $716M in VCE, and recorded $644M in losses related to it, since the JV's 2010 founding. CRN reported two weeks ago Cisco is thinking of "ending further financial investment in VCE."
    • Letting EMC take control of VCE would leave Cisco's server efforts focused on its UCS blade/rack server line (leveraged by VCE), which has been growing quickly itself and is now on a $3B/year run rate. Cisco recently added an integrated system to its UCS lineup (the UCS Mini), albeit one less powerful than VCE's systems.
    • EMC is now only up 1.1% AH. Shares were previously higher on hopes the "new business development" would be a VMware (NYSE:VMW) spinoff. VMware, meanwhile, is now only down 1.4% AH after providing light Q4 guidance.
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  • Oct. 13, 2014, 5:51 PM
    • Cloudscaling provides software for operating private and hybrid clouds based on the increasingly popular OpenStack cloud infrastructure (IaaS) platform. The startup argues its offerings are differentiated by more efficient virtual machine usage and strong interoperability (via APIs) with various public cloud services.
    • Bloomberg reports EMC bought Cloudscaling for less than $50M. The purchase comes on the heels of the July acquisition of cloud storage management software vendor TwinStrata, and is the latest example of the storage giant's efforts to grow its arsenal of software that can manage both EMC and non-EMC hardware.
    • Cisco, H-P, and Red Hat have also bought OpenStack startups in recent months, as enterprises and service providers give their support to a platform pitched as an open-source alternative to Amazon, Google, and Microsoft's proprietary offerings. GigaOm sees a consolidation wave afoot, and notes Cloudscaling founder Randy Bias "is well-regarded in OpenStack circles."
    • Subsidiary VMware might have mixed feelings about the purchase, given its vCloud platform competes against OpenStack. However, VMware (perhaps simply out of necessity) has been gradually warming up to OpenStack itself.
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  • Oct. 9, 2014, 2:07 PM
    • After previously following equity markets lower, VMware (VMW +0.2%) has spiked towards breakeven. dealReporter states (citing sources) several suitors have expressed interest. EMC (EMC -1%) has also ticked higher, but remains down on the day.
    • Elliott Management continues to push hard for EMC to fully spin off VMware. Though EMC has been reported to be mulling the idea, the company hasn't publicly signaled it's willing to make such a move. H-P's reported merger talks with EMC are said to have been driven by an interest in acquiring VMware.
    • VMware's size - its market cap is currently $40B - limits the number of companies that can digest it, especially after an M&A premium is baked in.
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  • Sep. 24, 2014, 2:33 PM
    • John Chambers has dismissed speculation Cisco (CSCO +1.3%) could make a bid for EMC (EMC -1.1%). "If [EMC CEO Joe Tucci] and I were going to do something here, we would have done it a year or two ago."
    • Likely an issue today: A Cisco deal would raise antitrust issues in the network virtualization/SDN software space, where VMware (VMW -0.3%) and Cisco have emerged as the early leaders. Also, Cisco's storage networking unit relies on OEM deals with EMC rivals (in addition to EMC).
    • Meanwhile, re/code reports Oracle (ORCL +1.5%), another company whose name was thrown around in EMC deal speculation, is also uninterested.
    • Recent reports stated EMC has held merger talks with H-P, but failed to agree (for now, anyway) on a price. Sources (possibly hoping to drum up M&A interest in EMC) added a deal with Cisco or Oracle was also possible. Re/code backs up the part about the H-P talks, while adding H-P was largely interested in owning VMware VMW via EMC.
    • Many on the Street still think EMC will make a deal before Tucci's planned Feb. 2015 retirement. Tucci hasn't named a successor yet; Argus' Jim Kelleher consider ex-CFO David Goulden, now the head of EMC's storage hardware/software unit, to be the favorite. VMware CEO Pat Gelsinger and Pivotal CEO Paul Maritz are also in the running.
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  • Sep. 22, 2014, 12:54 PM
    • A source talking with Barron's: "They’ve been talking for months and months about this ... Yes, it hit a snag in July, and then resumed in August, and now it took a pause again in September. It could resume ... They were very close last week, and then things went on pause. Things feel very imminent-ish."
    • The source (possibly hoping to bring an EMC suitor to the table) adds Cisco and Oracle are also viewed as potential EMC (EMC +1.3%) buyers. He/she also says a full VMware (VMW +1.1%) spinoff remains a possibility, and that EMC CEO Joe Tucci wants to complete a deal by year's end, before his planned Feb. 2015 retirement.
    • The WSJ reported overnight EMC and H-P (HPQ -0.5%) had "held off-and-on merger discussions" for nearly a year. CNBC has since reported EMC wanted a large premium, and that H-P was open to unloading its cash-cow printer unit as part of a deal. The Barron's source says an H-P printer unit sale would be "a down the road thing," if it happened.
    • The NYT has reported EMC and H-P were discussing a "merger of equals." H-P currently has a market cap of $68.3B, and EMC a market cap of $60.8B. EMC and VMware are trading higher, while H-P is off modestly amid a tech selloff.
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  • Sep. 22, 2014, 12:12 AM
    • EMC "held off-and-on merger discussions" with H-P (NYSE:HPQ) for nearly a year before the talks recently ended, the WSJ reports. The storage giant is also said to have held talks with Dell, but it's not clear where the discussions now stand.
    • The WSJ notes Cisco and Oracle are also seen as potential EMC merger partners, and reports JPMorgan is advising the company on its options. The WSJ's report follows one from the NY Post stating EMC is exploring selling its 80% VMware (NYSE:VMW) stake, in the wake of pressure from Elliott Management.
    • Beyond that, EMC and fellow IT hardware giants have seen their sales pressured by a secular shift towards cheaper hardware, and the adoption of white-label systems by Web/cloud service providers who account for an ever-growing portion of hardware usage. That might be motivating IT giants to explore consolidating, with the goals of becoming more efficient and pitching enterprise clients on end-to-end hardware/software/services offerings.
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  • Aug. 20, 2014, 4:43 PM
    • CloudVolumes asserts its software allows companies to "deliver any number of applications and any amount of data to any number of virtual machines within milliseconds or seconds." It offers products for both server and PC virtualization platforms, and also for migrating/delivering apps on cloud-based servers.
    • The synergies with VMware's (VMW, EMC) server and PC virtualization platforms, each of which have been dealing with tough competition, are easy to see. As it is, CloudVolumes' software integrates with VMware's vCloud Automation Center (aims to automate IT service delivery).
    • VMware hasn't disclosed the acquisition price. The company predicts the combination of CloudVolumes and VMware's Horizon (PC/app virtualization) platform will "allow customers to build a real-time application delivery system that enables all applications to be centrally managed, always available and up-to-date, and delivered to virtualized environments for desktop, server or cloud on-demand."
    • Yesterday: VMware shakes up C-suite
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  • Jul. 21, 2014, 6:39 PM
    • Though Elliott Management is pushing EMC (EMC +5%) to fully spin off VMware (VMW -2.5%), "management has made it clear its not in the best interest of EMC to do so" as recently as May, notes RBC. The firm considers it more likely EMC will buy out VMware's minority holders.
    • Nonetheless, RBC thinks Elliott's efforts could propel EMC's shares higher, given the low valuation assigned to EMC ($58B market cap) excluding its VMware stake (market value of $32B). Oppenheimer, for its part, is hoping Elliott will get EMC to return more cash or cut costs.
    • EMC has long argued holding onto VMware yields product synergies between VMware's server virtualization and data center/cloud management software, and EMC's storage hardware and management software.
    • Among other things, the companies are currently working on Project Mystic, an integrated server/storage appliance that includes VMware's server (vSphere), storage (VSAN), and networking (NSX) virtualization offerings.
    • Aside from product synergies, there's the fact VMware (expected to post 15%+ sales growth in both 2014 and 2015) continues to grow much faster than EMC's storage ops, which have been pressured by soft high-end demand and the adoption of cloud storage services running on white-label hardware.
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  • Jul. 8, 2014, 10:59 AM
    • EMC (EMC -1.3%) has acquired TwinStrata, developer of a software platform (called CloudArray) that creates a secure connection between on-premise storage and public cloud storage providers, and allows the resources to be jointly managed. Terms are undisclosed.
    • Among other things, CloudArray supports automatic cloud replication, local caching for high-use data, and integration with 3rd-party backup software. Supported cloud providers include Amazon, Google, Rackspace, and IBM/SoftLayer.
    • A July 2013 Network World review called CloudArray "something of a milestone" for on-premise/cloud storage connectivity, albeit while adding the product still "needs polish."
    • EMC says it'll integrate CloudArray with its high-end VMAX systems, and thereby provide an "embedded [cloud] data service" for VMAX. The move comes as rival NetApp overhauls its Data ONTAP OS to support joint on-premise/cloud storage management.
    • EMC has been busy fleshing out its software lineup amid soft hardware sales. Last year, the company rolled out its ViPR storage management software platform, which can handle both EMC and non-EMC systems, and acquired ScaleIO, a developer of software that can pool and manage storage scattered across commodity servers.
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  • May. 5, 2014, 1:19 PM
    • EMC boosts its flash memory offerings with the purchase of privately-held DSSD, Inc. for undisclosed terms. The deal is expected to close this quarter, and is not expected to have a material impact on EPS in fiscal 2014.
    • Source: Press Release
    • EMC World 2014: Online and live streaming
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  • Jan. 22, 2014, 9:45 AM
    • VMware (VMW -1.2%), parent EMC (EMC -1.3%), Citrix (CTXS -2%), and SAP (SAP -1.5%) are all lower following news of VMware's $1.54B acquisition of leading mobile device management (MDM) software firm AirWatch.
    • Citrix (thanks to the Zenprise acquisition) and SAP (through its Sybase unit) compete with AirWatch. As does BlackBerry (BBRY +4.6%), which remains higher following news of its real estate sale plans.
    • AirWatch's products, which also include mobile app management and security solutions, complement VMware's Horizon Workspace, which provides a secure, siloed workspace for business apps and files on mobile devices. With Citrix and SAP already offering an array of complementary mobile software tools for enterprises, VMware's move is in part an attempt to keep pace.
    • AirWatch, Citrix, SAP, and BlackBerry, along with other firms such as IBM (previous) and Good Technology, are trying to profit from growing enterprise interest in MDM solutions, which help companies cope with the ongoing bring-your-own-device (BYOD) trend.
    • In tandem with the acquisition, VMware has reported preliminary Q4 revenue of $1.48B (+15% Y/Y), slightly above a $1.47B consensus.  Q4 license revenue is expected to come in at $$687M (+15%), within a guidance range for 12%-16% growth. VMware's full Q4 results are due on Jan. 28.
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  • Jan. 22, 2014, 7:19 AM
    • VMware (VMW) has agreed to acquire privately held AirWatch, a provider of corporate mobile-management and security products, for $1.175B in cash and $365M of installment payments and assumed unvested equity.
    • AirWatch has over 10,000 customers globally and more than 1,600 employees.
    • VMWare will fund the deal through cash on hand and $1B of additional debt from EMC (EMC). (PR)
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  • Oct. 2, 2013, 4:01 PM
    • EMC and VMware's (VMW) Pivotal spinoff has acquired Xtreme Labs, a developer of mobile apps for Facebook, Twitter, Groupon, Microsoft, and many others. AllThingsD reports the purchase price was $65M.
    • Pivotal, which is prepping an IPO, already offers a variety of software tools and services for developing Web/cloud apps. With many, if not most, of the company's clients already working on mobile apps, there should be plenty of cross-selling opportunities.
    • Before GE bought a 10% stake for $105M, EMC owned 69% of Pivotal, and VMware 31%.
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  • Sep. 9, 2013, 10:26 AM
    • Virident, like Fusion-io (FIO +11.3%), offers PCI-Express-based server flash memory modules meant for performance-intensive applications. And beaten-down Fusion-io has been the subject of plenty of M&A speculation over the last two years.
    • Virident asserts its FlashMAX II PCI-Express modules offer 2x the performance of rival solutions.The company also provides FlashMAX Connect, an innovative software solution for allowing FlashMAX II modules to be clustered, to mirror/replicate content, and to act as caches for 3rd-party storage.
    • Western Digital (WDC -0.5%) should be able to greatly expand Virident's distribution. The purchase comes less than 3 months after WDC announced it's buying enterprise SSD vendor sTec for $207M.
    • In addition to Fusion-io, Virident competes against EMC, which offers its XtremSF flash modules and other flash storage products, and private flash storage system vendors such as Nimble Storage and Violin Memory.
    • Interestingly, Western Digital archrival Seagate (STX -0.8%) recently invested $40M in Virident and struck a reseller deal with the company. Though Seagate is probably getting a good return on its investment, it can't be happy to see Virident fall into WDC's arms. Will it counter by making a play for Fusion-io?
    • Previous: Western Digital buying Virident for $685M
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Company Description
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.
Sector: Technology
Country: United States