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© Copyright 2006 EMC Corporation. All rights reserved.
The Next Wave of Innovation: Broadening the Impact of ILM
David GouldenExecutive Vice President,Customer Operations
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2© Copyright 2006 EMC Corporation. All rights reserved.
Forward-Looking Statements
This presentation contains “forward-looking statements” as defined under the Federal Securities Laws. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in information technology spending; (iii) risks associated with acquisitions and investments, including the challenges and costs of integration, restructuring and achieving anticipated synergies; (iv) competitive factors, including but not limited to pricing pressures and new product introductions; (v) the relative and varying rates of product price and component cost declines and the volume and mixture of product and services revenues; (vi) component and product quality and availability; (vii) the transition to new products, the uncertainty of customer acceptance of new product offerings and rapid technological and market change; (viii) insufficient, excess or obsolete inventory; (ix) war or acts of terrorism; (x) the ability to attract and retain highly qualified employees; (xi) fluctuating currency exchange rates; and (xii) other one-time events and other important factors disclosed previously and from time to time in EMC’s filings with the U.S. Securities and Exchange Commission. EMC disclaims any obligation to update any such forward-looking statements after the date of this presentation. This presentation contains non-GAAP financial measures. A reconciliation to GAAP is included in the Current Report on Form 8-K filed by EMC on January 24, 2006.
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3© Copyright 2006 EMC Corporation. All rights reserved.
($106M)
$438M
$896M
$1.3B
2002 2003 2004 2005
$5.4B$6.2B
$8.2B
$9.7B
Revenue ($B)
Net Income ($M)
Consistent Top Line and Bottom Line Growth:Three Years Plus!
Net income has been adjusted to exclude restructuring charges and other special items.GAAP net income/(loss) for 2002 was ($119M); 2003 $486M; 2004 $871M and 2005 $1,133M
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4© Copyright 2006 EMC Corporation. All rights reserved.
Transforming our Business
Q405Q102
Software26%
Services15%
Systems59%
Systems59%
Software37%
Services15%
Services15%
Systems48%
Systems48%
Mix excludes other business revenue.
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5© Copyright 2006 EMC Corporation. All rights reserved.
Investments in EMEA Delivering Results
NorthAmerica
APJ
EMEA
LatAm
59%
17%
22%
2%
NorthAmerica
APJ
EMEA
LatAm
57%
11%
30%
3%
Q102$1302M
Q405$2710M
108%
180%
2006 Sales Kick-off
6EMC CONFIDENTIAL—INTERNAL USE ONLY
Establishing & Extending Market Leadership in EuropeWestern Europe External RAID Market Share
*HP includes HWP and CPQ shareSource of base data: IDC, 12/05.EMC/Dell includes EMC’s external RAID revenue plus the portion of Dell’s external RAID revenue that IDC estimates to be EMC CLARiiON arrays. (IDC’s Dell CLARiiON revenue estimates include Dell’s channel markups.) Dell w/o EMC CLARiiON not graphed.
0%
10%
20%
30%
Q102 Q305
EMCEMC
HPHP
IBM IBM
Q204
27%
21%
13%
30%
15%
13%
EMCEMC
HPQHPQ
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7© Copyright 2006 EMC Corporation. All rights reserved.
EMC: Delivering Strong Results in Q4’05
2005 performance momentum– Q4 record revenue. 10th consecutive quarter of double-digit growth
Balanced strength across all GeographiesSystems portfolio strength
– Great customer reception for new Symmetrix – Mid tier strength
Software portfolio strength – First billion-dollar quarter– Excellent opportunity for all of our software solutions– Taking share in Backup and Content Management – VMWare had another sizzling quarter
EMC: Delivering Strong Results in Q4’05
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8© Copyright 2006 EMC Corporation. All rights reserved.
Other 2005 Highlights
Market Share leader in every major hardware and software segment
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9© Copyright 2006 EMC Corporation. All rights reserved.
Global Market Presence:Q3 2005 Worldwide Market Share
Source: IDC Q3’05 Disk Storage Systems Quarterly Tracker, December 2005*Combines EMC’s revenue with Dell’s Dell/EMC CLARiiON revenue
ExternalDisk Storage
EMC 20.3%HP 19.1%IBM 12.9%Dell 8.4%HDS 8.3%EMC/Dell* 26.6%
Networked Storage(NAS, Open, & iSCSI SAN)
EMC 27.2%HP 21.5%IBM 11.3%NetApp 9.1%HDS 7.3%Dell 7.2%EMC/Dell* 33.7%
ExternalRAID
EMC 22.1%HP 17.0%IBM 13.3%HDS 9.0%Dell 7.4%NetApp 6.3%EMC/Dell* 29.0%
EnterpriseContent Mgt (CY04)
IBM 17.4%IXOS/Open Text 11.7%EMC 11.6%FileNet 10.5%
StorageSoftware
EMC 29.1%Symantec 20.0%IBM 9.4%NetApp 6.9%HP 6.7%
ReplicationSoftware
EMC 37.0%NetApp 18.4%IBM 8.2%HP 8.7%HDS 8.4%
SRMSoftware
EMC 49.8%Symantec 10.9%CA 8.1%IBM 6.4%HP 6.2%
Backup /Archive
Symantec 39.6%IBM 14.6%EMC 12.8%CA 9.0%So
ftwar
eH
ardw
are
EMC: #1 EMC: #1 EMC: #1
EMC: #1 EMC: #1 EMC: #1EMC: Fastest Growing
EMC:Fastest Growing
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10© Copyright 2006 EMC Corporation. All rights reserved.
Other 2005 Highlights
Market Share leader in every major hardware and software segment
EMC a leader across Gartner Magic Quadrants: Midrange Arrays, Storage Services, Content Mgmt, and SRM/SAN software
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11© Copyright 2006 EMC Corporation. All rights reserved.
2H 2005: Midrange Enterprise Disk Arrays
EMC a Leader Across Gartner Magic Quadrants
2005: Enterprise Content Management
Software
Q4 2005: SRM and SAN Management
Software2005: Storage Services
* Magic Quadrant Disclaimer—The Magic Quadrant is copyrighted November 3, 2005 by Gartner, Inc. and is reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner's analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product, or service depicted in the Magic Quadrant; and does not advise technology users to select only those vendors placed in the "Leaders" quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
2H 2005: Midrange Enterprise Disk Arrays
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Other 2005 Highlights
Market Share leader in every major hardware and software segment
EMC a leader across Gartner Magic Quadrants: High-End and Midrange Arrays, Storage Services, Content Mgmt, and SRM/SAN software
EMC shipped more capacity in 2005 than 2000-2003 combined
EMC shipped more capacity in 2005 than the entireindustry in 2003
InfoWorld 2006: Most awards of any IT vendor
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13© Copyright 2006 EMC Corporation. All rights reserved.
2005 Product Highlights: The Most Awards of Any Vendor
BestWorkstationVirtualization
VMware Workstation 5.5An indispensable companion to software developers and testers
BestServer
VirtualizationVMware ESX Server
and VirtualCenterDynamic duo points to
new possibilities indatacenter management
Best Storage Virtualization
InvistaPreserves investments in existing hardware without
sacrificing manageability or performance
BestEnterprise CMS
Documentum 5,Collaborative Edition
Impressive unified approach to managing content
creation, reuse, archiving, and disposal
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14© Copyright 2006 EMC Corporation. All rights reserved.
Other 2005 Highlights
Market Share leader in every major hardware and software segment
EMC a leader across Gartner Magic Quadrants: High-End and Midrange Arrays, Storage Services, Content Mgmt, and SRM/SAN software
EMC shipped more capacity in 2005 than 2000-2003 combined
EMC shipped more capacity in 2005 than the entire industry in 2003
InfoWorld 2006: Most awards of any IT vendor
Fastest-growing large-cap enterprise IT company in 2005
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15© Copyright 2006 EMC Corporation. All rights reserved.
EMC is Valued Among the World’s Top Enterprise IT CompaniesTop 10 IT Product Technology Companies Ranked by Market Cap (as of close of market Jan. 25, ‘06)
Note: All Revenue and EPS numbers are based on calendar years.EMC EPS growth was 31% on a GAAP basis*Consensus estimates
Rank Company Market Cap ($B)2005 Est.
Rev Growth2005 Est. EPS
Growth
1 Microsoft 280 8% 0%21%
5%18%23%20%32%12%47%25%
2 Intel 128 13%3 IBM 128 3%4 Cisco 113 10%5 HP 89 7%6 Dell 70 13%7 Oracle/Peoplesoft 63 9%8 SAP 57 12%9 EMC 33 17%
10 Symantec/Veritas 19 14%
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16© Copyright 2006 EMC Corporation. All rights reserved.
Other 2005 Highlights . . .Momentum and Market Leadership
Market Share leader in every major hardware and software segment
EMC a leader across Gartner Magic Quadrants: High-End and Midrange Arrays, Storage Services, Content Management, and SRM/SAN software
EMC shipped more capacity in 2005 than 2000-2003 combined
EMC shipped more capacity in 2005 than the entire industry in 2003
InfoWorld 2006: Most awards of any IT vendor
Fastest-growing large-cap enterprise IT company in 2005
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17© Copyright 2006 EMC Corporation. All rights reserved.
Growth: ~8%
Addressing a Large Market . . .with Lots of Room to Grow!
Sources: IDC, Gartner, EMC estimates
2005 Market~$51B+
EMC ExpectedShare ~19%
Market Includes:External StorageSAN Connectivity
Storage Mgmt SoftwareInformation Mgmt Software
Backup and ArchiveStorage Services (excludes TPM)
Content Mgmt SoftwareServer Virtualization
Network Management SW
2006 Market~$55B+
EMC ExpectedShare ~20%
Market Includes:External StorageSAN Connectivity
Storage Mgmt SoftwareInformation Mgmt Software
Backup and ArchiveStorage Services (excludes TPM)
Content Mgmt SoftwareServer Virtualization
Network Management SW
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18© Copyright 2006 EMC Corporation. All rights reserved.
2006 Technology Spending Priorities -- CIO Survey
Source: Morgan Stanley November CIO Survey, Jan. 3, 2006
1. Security (Software) 11. Wireless LAN (clients)2. Security (Network Equipment) 12. New Custom Development3. Storage Area Networks 13. Routing4. Wireless LAN (access points & routers) 14. Systems Management Software5. Storage Software 15. Application Integration Software6. Portal Software 16. Notebook PC’s7. VOIP Infrastructure 17. Document Management Software8. IT Education and Training 18. Automated Testing Tool9. Storage Hardware 19. Microsoft Office Upgrade10. Business Intelligence Software 20. Application Software Server
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19© Copyright 2006 EMC Corporation. All rights reserved.
2006 EMC Outlook
Revenue: $11.1B - $11.3B 15% - 17%EPS: $0.63 - $0.66 19% - 25%
(5¢)
19¢
37¢
53¢
2002 2003 2004 2005
Revenue ($B)
$5.4B$6.2B
$8.2B$9.7B+
63-66¢
2006e
$11.1–11.3B
EPS (¢)
Net income has been adjusted to exclude restructuring charges and other special items. 2006 EPS guidance excludes stock option expense of approx. $.09 p
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20© Copyright 2006 EMC Corporation. All rights reserved.
Customers’ Information Storage andManagement Challenges
CIO’s Dilemma:How to manage all the information
growth with limited resources?
Information stored on disk arrays ~ 70%IT budget growth ~ 4 - 5%IT environment getting more complexSLA’s continue to expand and tightenProtection and security increasingly important
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21© Copyright 2006 EMC Corporation. All rights reserved.
EMC’s Strategy
Information Lifecycle Management:a strategy to align IT infrastructure
with the business based on the changing value of information
ILM
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22© Copyright 2006 EMC Corporation. All rights reserved.
Information Lifecycle Management
• Classes of infrastructure• Information placement• Storage management
automation
Phase 1: Tiered Infrastructure
App App
Data Data
App
Data
• Policies for key applications
• Application-specific ILM components
Phase 2:Application-Specific ILM
App App App
Data Data
Phase 3:Cross-Application ILM
App App App
• Enterprise-wide repositories
• Integrated view of information assets
• Infrastructure Virtualization
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23© Copyright 2006 EMC Corporation. All rights reserved.
What EMC Offers: Information Infrastructures … for ILM
Content Services
Storage Security
ArchivingArchiving
Data MobilityData Mobility
Protection OptionsProtection Options
Tiered StorageTiered Storage
ResourceMgmt Services
andSolutions
Partners
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24© Copyright 2006 EMC Corporation. All rights reserved.
Today’s Announcements
Data MobilityData Mobility
Protection OptionsProtection Options
Tiered StorageTiered Storage
Content Services
Storage Security
ResourceMgmt Services
andSolutions
Partners
Archiving
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25© Copyright 2006 EMC Corporation. All rights reserved.
Sustained Investment inInformation Management & Storage R&D
2003 2004 2005
$720M $850M >$1B
2006
>$1B
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Realtime NetworkSystems Management
Server Virtualization
UnstructuredData ContentManagement
Protection / RecoveryIntelligent Data Movement
Backup /Recovery
for SMB
Extends virtualizationto NAS environments
Invested >$4 Billion (’03 – ’05) inStrategic Software Acquisitions
Information capture, digitization,categorization.
2003 2004 2005
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2005’s Prolific Product Rollout
New PlatformsDMX-3CLARiiON AX100i, CX300i, CX500i with iSCSI supportCLARiiON CX300-s,CX500-s, CX700-sCelerra NSX NAS GatewayCentera Four-Node
New & Enhanced SoftwareDocumentum 5.3Documentum eRoom Enterprise 7.3Centera Seek, Centera Chargeback ReporterEMC InvistaDantz Retrospect 7EMC Smarts MPLS ManagerVMware ACEVMware Workstation 5.5ESX Server 3Virtual Center 2EMC RecoverPointNetworker 7.3Backup AdvisorSmarts ApplicationConnectivity
New Services & SolutionsMaking Storage SimpleEnterprise Services Ready Classification and Policy ServicesEMC Open MigratorSAMS Surveillance AnalysisDatabase Xtender for SAPFramework Integration ServicesEMC Solution Suite for SQL ServerEMC WebSupportEMC Secure Remote Support Gateway
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Product Innovation Will Continue at Full Steam in 2006
More new and enhanced products and services than in 2005
New Platforms New & Enhanced Software New Services & Solutions
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29© Copyright 2006 EMC Corporation. All rights reserved.
Excited about 2006
Strong momentum and market positionPositive economic environmentIT spending up around the world in 2006
– EMC focused on many of the hottest IT/Customer priorities– EMC focused on a large market with room to grow
ILM strategy paying dividendsStrong EMC product cycleEMC will gain share in 2006