View from the top - storing your assets

Mike Ruettgers, executive chairman of EMC, spoke to Computer Reseller News US about opportunities in the booming storage market, and downplayed fears that a slowing economy will affect this sector as much as any other.

As the economic ill-wind in the US bites into IT budgets both sides of the Atlantic, will such IT warhorses as storage feel the chill also? And, if not, will other vendors, fingers burnt elsewhere, attack the storage market? Computer Reseller News US quizzes EMC's executive chairman, Mike Ruettgers.

CRN: What are the driving factors behind the continuing growth in the storage market?
MR: One of the general truths is that the amount of information people are storing appears to be doubling every year. A recent study by the University of California at Berkeley shows that to be the case. You know, people put these systems in place, they start collecting information and just never get rid of what they collected, so it literally doubles every year. We're just starting to see some of the demand from the investments made around customer relationship management [CRM] or supply chain management [SCM].

We're seeding the ground for what will probably be another round of demand next year. If you looked at the end of last year, CRM and SCM have become big these days, at least at the enterprise level.

CRN: So with these applications, businesses still do not have any idea of the amount of storage they are actually going to need?
MR: That's right. They are in the business of putting the systems in and changing how they do business. And it's not unusual to take 18 or 24 months before they turn them on. Until they do, they're not collecting the information.

CRN: Although the storage market is growing, aren't we looking at a downturn in IT spending overall?
MR: There is some debate as to what is being seen. We certainly haven't seen that. If there is a downturn, it is probably going to be short-term. And even in a downturn, we don't think most of the change will come out of storage. Storage has become much more of a non-discretionary expenditure. Once you put these systems in place, you have to collect the information. Otherwise, why bother with them?

CRN: If there is a downturn and the strong demand for storage capacity continues, wouldn't that give other vendors an opportunity to come in with lower-priced products aimed at smaller IT budgets?
MR: When things slow down, you might expect pressure on pricing. But EMC has been the leader in driving down pricing in the market. We drive prices down about 30 per cent a year. So someone coming into the year with a fixed budget will, by the end of the year, be able to buy 30 per cent more than they thought they could.

CRN: That is the first time we've heard anyone describe EMC as a price leader.
MR: Well, you have to be careful with definitions. When I say price leader, I'm saying we are the ones making prices in total go down.

We are not the lowest price, if that's what someone means when they say they are the price leader. When you balance what you pay for against what you get, it's clear we give customers greater value.