EMC Earnings Call NUGGETS: Europe’s Evolution, Cloud Storage Strategy

On Tuesday, EMC Corporation (NYSE:EMC) reported its second quarter earnings and discussed the following topics in its earnings conference call. Take a look.

Europe’s Evolution

Ittai Kidron – Oppenheimer & Co. Inc.: Joe, maybe you can talk a little bit more about Europe, I know you mentioned north being a little bit better than the south, but can you talk about the evolution through the quarter? What have you seen and in your assessment when you’re looking at your customers in Southern Europe, how long do you think they can kind of hold out the spending before things kind of catch up to them and they have to whether they like it or not spend on storage data still grows downturn or not?

A Closer Look: EMC Earnings Cheat Sheet>>

Joseph M. Tucci – Chairman and CEO: Ittai, first of all, the customers in Europe are spending, they’re just not spending as much. Lot of the difference and several points of the difference was currency; I think it was 6 points of difference. I think with constant currency we grew 5% in Europe and of course in reported it was minus 1, so lot of the headwinds in Europe is currency and from the news today, its looks like that’s continuing. So, there is a drive in Europe for sure, just like there is here for productivity and if we can help customers with their productivity as I said, gain competitive advantage, help control costs, get more intimate with their customers, they are investing. What they’re doing is they’re taking longer to invest, they’re being like the good carpenter, they’re measuring twice and cutting once and obviously they’re buying just exactly what they need and not buying in excess. So, it’s not that we’re down on Europe by any means, but we are feeling the effect and I think this will be with us for a while. I don’t think this is a short term phenomenon and that causes you to have things that are more back end loaded because it just takes longer to get through all the approval cycles. So, all those things kick in but Europe is not just laying flat, doing nothing. They are spending.

Cloud Storage Strategy

Brian Marshall – ISI Group: Specifically, with respect to cloud storage, public cloud storage, a business model that is and as there’s more Open APIs out there, obviously a lot of these infrastructures are homegrown IT kind of taking an NFS on a JBOD. Can you talk a little about as this growth kind of ramps up pretty quickly here, what the impact to EMC will be in other traditional enterprise storage vendors over time and how you might offset any migration of Tier 2 workloads that you might see there over time?

Joseph M. Tucci – Chairman and CEO: As you saw Brian, the first market I mentioned in terms of high growth was two service providers. So there’s a concept out there that we’re not selling, they’re all home growing their own and that’s simply not true. If you look across our line of – we have a VMAX specifically for service providers. There’s a lot of interest in Isilon, scale-out tremendous interest in Atmos and also VNX. So, it actually is a big market for us and if you look at that market collectively, we’re doing actually quite well in it. So, we believe that our strategy of having a play both inside building cloud, inside customers data centers, the private cloud and working that in conjunction and building out a big ecosystem of public cloud providers is a winning strategy and so far that’s working quite well and we’re going to keep pushing and you see the growth of some of these products like Atmos is pretty impressive.