EMC Corporation, leader in information management and storage, presented its annual strategy update to more than 300 investors, analysts and journalists at the Equitable Center in New York City and over the world wide web. EMC executives reviewed the company's track record of delivering market-leading products and execution while detailing EMC's product development and business strategies for information lifecycle management (ILM) and VMware's Virtual Infrastructure. EMC also detailed the critically important role of resource management and information security management in its current wave of innovation.
The company acquired content management software firm Documentum in 2003, shifting its position from storage provider to information lifecycle management space.
Joe Tucci, EMC President and CEO, said, "EMC's market position has never been stronger, as measured by our customers' enthusiasm for our strategy and the consistency of our execution. Customers around the world are placing their trust in EMC and our solutions to accelerate their deployment of ILM and better protect, secure, move, and intelligently manage their information."
"Information has been EMC's central focus for the last 15 years," continued Tucci. "As we evolved from information storage to information lifecycle management, we have dramatically improved our customers' relationships with their information. Today, as we continue the most prolific new product rollout in our history, EMC is providing organizations of all sizes with new and better ways to manage the increasing complexity of their IT infrastructures and enhance the value of their information to their businesses."
Tucci and members of EMC's executive management team summarized the company's plans to capitalize on an estimated $55 billion addressable market opportunity in 2006, through helping customers at large, medium and small organizations implement ILM strategies that meet their specific information infrastructure needs. The new opportunities include an expanded focus on resource management, enabled primarily by network systems management software from EMC's recent Smarts acquisition and its own market-leading storage resource management (SRM) products. Resource management helps customers better manage their information resources, determine what resources should be available to which information, and quickly pinpoint existing and potentially disruptive events within the information infrastructure.
EMC executives also articulated the importance of making information security management pervasive throughout a customer's information infrastructure through integrated, end-to-end security management. EMC is driving information security management through leveraging existing technology assets and capabilities, new and enhanced products and services, and industry partnerships.
Tucci and Bill Teuber, EMC Executive Vice President and Chief Financial Officer, reaffirmed EMC's previously stated 2005 financial goals of 17% revenue growth and diluted earnings per share of $0.50 to $0.51 for the year. They also:
-- Announced expectations for EMC's addressable market in 2006 to grow 7% and for EMC to grow revenues twice the market rate to approximately $11 billion next year.
-- Reiterated EMC's focus on raising operating margins to the high-teens as a percent of revenue in the fourth quarter of 2005 and targeted the further improvement of operating margins to exceed 20% in the fourth quarter of 2006 excluding the impact of adopting FASB's Statement No. 123R on expensing equity compensation in 2006.
-- Detailed plans for EMC's growing cash and investment position, which totaled $7.674 billion at the end of the second quarter of 2005. Since EMC reported its second quarter earnings on July 21, 2005, the company has purchased 11.2 million shares of its stock for approximately $157 million. Teuber stated that the company expects to buy back more shares in the second half of 2005 than in the first half of this year.
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