This week I'm at the worldwide meeting of analysts for EMC, a company that is in rapid transition and currently leads the market in secure information management. For what was a storage company, it has been investing heavily not in hardware but in software, and its most famous acquisition is VMware, which is as powerful and popular in the IT space as Apple is in the consumer space.
EMC's view of the future is that the majority of us in a few years will have most of our storage in the cloud, and it's building the company to be the leader in supplying solutions to those who need and provide the related services.
Let's chat about what EMC thinks is important, and what it means for companies and individuals if it's right and the future is indeed in the clouds. I'll start by covering where EMC is focused and then conclude with what it means.
Just because EMC is focused on buying software companies doesn't mean it doesn't don't have a hardware focus. Hardware is at the root of what EMC is; software represents a good deal of its future. We'll deal with the root first.
Obviously, availability is incredibly important if everything is in the cloud, and inexpensive storage will be the core of being successful and dominant. This means "five 9s" availability on arrays; this is one of the fundamental goals the CEO expressed right up front. But to keep costs down, there's a heavy focus on intelligent storage tiering, because EMC posits that the related practices provide the strongest return on investment from effective storage management.
With every major vendor, there is a huge focus on energy and data center efficiency. EMC is aggressively on this path as well. Other firms, like HP, have represented that effective power management can pay for a lot of current-generation hardware within a year because so much of the old stuff is incredibly inefficient.
While expertise is important in any discipline, IT is thinly spread and systems that are difficult to implement and use have a relative high cost and adversely affect a company's agility. It is interesting to note just how popular ease of use is becoming as a strategic differentiator. EMC is intending to drive this very hard.
EMC is so serious about security that it bought RSA, arguably the most powerful, in terms of presence, of the security firms and one focused solidly on secure data access. Central to the future is a combination of pervasive encryption and centralized key management. Users should have no access to keys and, in combination with technologies like the Trusted Platform Module and the new Seagate and Hitachi TPM-compliant encrypted drives, promises an end-to-end level of security that is highly desired.
One of the common areas of exposure is identity management and user authentication. This is one of the advantages of the RSA acquisition, with tools that can best address this universal problem. I know that when I used to do security audits, this area was the most likely to have major problems and see secure information become compromised.
And, because we live in a hostile world, let's tie in event management: responding effectively to threats and problems by reporting, recording, and finally acting on those threats, ensuring at all times that the critical information inside the company is safe.
Content and Information Management
Obviously, content management is central to information management and gets a focus that ranges from the acquisition to the distribution to the effective consumption of this content. But, in today's world, an increasing amount of data is unstructured. Google reports that six hours of video is uploaded onto YouTube every minute, and that is only one example of the massive amount of hard-to-manage information that firms are struggling with and EMC is focused on addressing.
This requires development in areas that move far from traditional storage and data management and expand to embrace workflow, business process management and collaboration. This is what information life cycle management relies on, and it goes to the core of why EMC is used by companies like Intel for this very purpose. To make information life cycle management work, you have to include policy-based and instrumented data classification and digital rights management. To keep this all easy to manage and consistent, you also have to incorporate the management of the related policies and all of this is needed to create a complete solution.
In the end, information has to get into systems and be provided to those who need it. The concept is simple; the execution is anything but, and the successful company is the one that can come up with easy-to-use solutions. EMC's primary competitor is IBM.
EMC vs. IBM
EMC's strategy against IBM is one of focus. The way to go after a larger company is not to emulate it but to focus and outperform in that area. IBM has an R&D budget that significantly exceeds EMC's, but when spread across all of IBM's divisions, it is reduced comparatively to what another large company -- like EMC -- can fund if it focuses.
Trying to execute a broad attack strategy has been the problem with companies that have tried to compete with IBM and Microsoft over the years. EMC is rightly not going down that path. Large companies can be effectively attacked by smaller companies if they remain focused. Google and Logitech effectively win against Microsoft, and EMC is larger and growing faster than IBM in its area of specialty. While it's unlikely to become larger than IBM, its path should continue to ensure it is faster-growing in both revenue and profit -- assuming it can execute at a level equal to or better than it currently is.
EMC's Sustaining Advantage: Partnering
It is interesting that, technology aside, EMC's real strength appears to be in making effective partnerships. A panel with Howard Elias, EMC's Global Services and Resources Manager, moderated three partners, Cisco, Microsoft and Deloitte. Cisco highlighted how it had found a way to work with EMC in a wide number of areas to move information around the enterprise and secure it. For Microsoft, both sides appeared sincere in their very close relationship, and Deloitte indicated EMC was one of the vendors it was closest to and highlighted a government engagement where only EMC was capable of providing the robust solution this highly critical customer would accept.
In all cases, these executives did not appear to be simply providing lip service; each cited real benefits from working with EMC and partnerships like these are a good deal of why EMC is growing as fast as it is and why more think of it as a partner than a competitor, which has to keep the cost of deploying EMC technology down (vendor conflict can dramatically increase the cost of any deployment).
One observation is that while some companies seem to do partnering announcements monthly, but don't seem to do much with them, EMC does very few and has something like 10 close partners they focus on. The lesson here is that doing a lot of partnerships is not particularly valuable if you don't have the bandwidth to manage them. Doing a few well can be very lucrative and it's the old quality vs. quantity dilemma that always seems to favor the quality side, in my experience.
Looking to the Future
OK, assuming EMC is right -- and I think its strategy is in line with industry trends -- what does this mean for the future?
From an IT perspective, it means power-efficient solutions that manage data, even unstructured data, at a very deep and broad level. It means granular security that ties the data element to the authorized author or consumer of that data and no longer relies on perimeter security. In fact, in some instances, the data may exist in unsecured repositories but still be secure by nature of how well it is encrypted and how effectively access to the respective data elements is managed.
From a personal perspective, this means local storage becomes more of a cache and that local high-capacity removable media like CDs, DVDs, memory sticks and portable hard drives will become obsolete except for niche markets and underdeveloped environments. Data will exist in the cloud. There is a massive amount of industry effort, well beyond what EMC is doing, to make this happen.
If all aspects of this become true, we not only will see vastly better data access and discovery, we'll also see an improvement in security and privacy because, even if you can get the sensitive file, you won't be able to view it unless you are authorized to do so.
Some companies, particularly in the pharmaceuticals market, are actually starting to see much of the benefit from this in terms of both agility and security. The rest of us will have to wait a few years. The takeaway is that, regardless of the vendors you use, the solution includes all aspects of what I've discussed and the true benefits come from making sure all of these aspects are addressed.