EMC's results get mixed reaction from resellers
Despite an increase in product turnover, the storage giant lowers its profit estimates for the year
EMC resellers have expressed mixed reactions to the storage giant’s second quarter 2006 financial results.
Compared with the same period last year, the vendor – which acquired RSA Security earlier this month (CRN, 3 July) – saw total turnover increase by 10 per cent to $2.57bn, total product turnover increase by nine per cent to $1.83bn, while total services turnover increased from $656m to $741m. However, the vendor has lowered its profit estimates for the full year.
Joe Tucci, chief executive of EMC, said in a statement: “While our execution was not up to our standards, business and customer demand for our products and solutions remains strong.
“We know what we need to do to sharpen our execution. We will focus our efforts on both EMC’s short-term performance and our company’s long-term growth and opportunity.”
The vendor saw its backup and archive licence turnover grow by 13 per cent, compared with the same period last year. EMC’s virtualisation subsidiary VMware also increased its turnover by 73 per cent to $157m, compared with last year, which the vendor claimed was its highest growth rate in five quarters.
However, Jeanne Razzell, managing director of EMC VAR Systems Support, said: “EMC seems to be slowing down. This may be because of the effect of its recent acquisition costs and changes in its business focus. I don’t think EMC’s results affect the channel much, but its lead generation has dried up for the channel recently.”
Richard Love, marketing director at EMC VAR Computers Unlimited, said: “What I see is a strong performance from EMC, but perhaps one that’s not quite up to its own high standards.”