So I’m reading the EMC analyst day presentations of Joe Tucci, Mark Lewis and Diane Greene. The analysts in question are Wall Street financial analysts. Some of them are pretty knowledgeable about IT, but their money comes from predicting earnings-per-share and stock price movements, not technology.

Route 128 Rot?
EMC is a sales and marketing company. They are shameless, ruthless and the last bastion of old-style account control in the IT industry. When the original Symmetrix was a reasonably fast RAID array, they pushed performance. When its aging, single-point-of-failure cache architecture was overtaken by competitors, the word “performance” ceased to exist in EMC. When Y2K was going to end civilization as we knew it, they jumped on the scare mongering and pushed Timefinder and additional capacity as the IT solution. It was about that time that the previous CEO forecast that EMC would be a $12B business in, if memory serves, FY01. Instead things dramatically reversed course and EMC became a $6B company that year. Oops!

Thus I find it interesting that EMC’s latest CEO, Joe Tucci, is busy talking up the business to everyone who will listen. Of course, that is a CEO’s job, but in this industry people who make five year forecasts are usually delusional or analysts – not that they can’t be both – so naturally I wonder what is bothering Joe. Something isn’t quite right in EMC-land.

Take the Money and RUN!
Which is what the stock market and EMC execs believe. EMC’s stock has been more volatile than the tech-heavy NASDAQ over the last three years, has been trending lower for most of the last year, and has been absolutely creamed by NetApp. In the last 12 months there have been 18 insider sales of 1.67 million shares and just one insider buy – and that was for 10 (yes, TEN) shares. That’s like hearing 10 people out of a million yelling “rah, rah, rah.”

But what is wrong? Let me count the ways. Customers don’t much like them, after years of brutal pricing. Their mishmash of products is anything but seamless. And EMC’s marketing is clearly broken. Can’t anyone in Hopkinton spell “preferred”? Yet these are symptoms.

Big changes are happening out there and EMC’s mainframe schtick is tired. Even IBM gave it up. EMC needs to re-invent itself. The one moderately smart thing Tucci said is

“It is our belief that IT infrastructures are at the beginning of a significant transformation, from being static and platform centered to dynamic and service oriented. . . .”

Really? Then he screwed up by saying that EMC is the guide customers need. Joe, customers don’t need a guide to spend a lot of money until they fall off a cliff. They need companies that are scoping out the changing landscape of technology economics and applications and building production class products that give them an economic advantage. Either EMC *thinks* it is doing this, and failing, or *knows* it isn’t, and spinning.

The slide that summed up EMC’s problem is from Mark Lewis:

  • Delivering Information-centric IT
    • Our customers have embraced ILM as their strategy
    • Simple, seamless and secure are key themes
      for advancing ILM
    • EMC has and continues to invest in innovative technologies
    • Only EMC is positioned to deliver this vision

Only one of these five statements is true. Does anyone in Hopkinton know that? Does anyone know what to do about it? Or are they too stunned to react?

Stay tuned. The fate of the last great hardware company on Route 128 hangs in the balance.