EMTM 561—Professor Gilmont

May 21, 2010

Presented by: Joe Raimondo

EMC Corporation—The Opportunity

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Role of R&DEMC maintains its market

leadership by focusing first on

technology leadership.

To maintain its technical

superiority, EMC has adopted a

traditional approach to R&D

spending, targeting 12 percent of

revenue as a benchmark.

In addition to greatly expanding its

global R&D footprint, EMC targets

• EMC is the only major storage company to build its own

products 'from A to Z‘

• EMC Does not rely on R&D/product development

partners like LSI or OEM partners like Hitachi.

• EMC recently released its V-Max next-generation Symmetrix global R&D footprint, EMC targets

strategic acquisitions to add to its

technical capabilities.

• EMC recently released its V-Max next-generation Symmetrix

architecture for supporting virtual data centers.

• V-Max resulted from extensive internal development effort

• EMC’s cloud computing coalition and partnership with Cisco

and VMWare has placed EMC’s R&D effort at the heart of

expanding this effort.

• SAP’s private cloud storage to run on EMC’s Vblock

Culture/StyleEMC pursues blended strategy of

centralized R&D investment

coordination with distributed

accountability among its 16 global

R&D sites.

In addition to greatly expanding its

global R&D footprint, EMC targets

strategic acquisitions to add to its

technical capabilities.

Simultaneous “loose-tight”

• Platform-based product strategy leads to emphasis on

incremental approaches

• New platform models take years to develop and evolve

through internal development and acquisition

• End-to-end development strategy puts extra pressure on R&DSimultaneous “loose-tight”

management of R&D centers

allowing substantial local autonomy

while maintaining enterprise

perspective and span of control.

• Big company vs. entrepreneurial approaches – maintain

creative tension

• EMC’s acquisitions have provided it with development

resources in new technologies and markets

Integration with Corporate StrategyEMC has two CTOs – one with a

purely technology portfolio and one

who serves as a “CTO for

marketing.” Technology and market

development are intimately

entwined.

EMC also depends on an extensive

network of partnerships and

relationships. Its technical

organization must be suitably

flexible to provide resources

• CTO reports to EVP for Corporate Strategy

• Also Global CTO for Marketing report

• EMC's broad portfolio of hardware and software generally

relies on different management interfaces and processes

flexible to provide resources

EMC’s CTO organization also

participates closely in evaluation of

potential acquisitions as well as

integration of technical resources

post-acquisition.

Coordination between internal

development and acquisition is a

challenge.

• Coordinating R&D and acquisition strategy is challenging;

product portfolio still has issues with integration

• Risk of NIH syndrome

• Acquisitions have overlapped with home-grown

technologies

Effectiveness of R&D TechnologyEMC’s has developed the capability

to consistently roll out new

generations of technology.

In addition, it has a track record or

integrating new technologies into

legacy platforms .

• The long-term future of the company depends on product

and platform innovation in the face of massive potential

growth in its core areas.

• EMC raising research and development spending in 2010 will

be up 20 percent.

• Shows executive-level trust and sponsorship for R&D

• Technology leadership team has developed and executed a

plan for expanding the market impact of investments in new

product development.

Unique Strengths and Weaknesses

EMC’s close coordination between

technology and market

development results

EMC has established a track record

of successful integration of

acquisitions.

EMC’s large legacy installed base is

a substantial attractor for R&D

management; drawing resources

into markets that are susceptible to

• EMC’s adopts best practices from industry leaders,

• Borrows IBM’s world-renowned R&D operation

• Partners with Cisco, well-known for acquisition

integration

• Coordination of efforts in complex ecosystem (partners,

standards, implementers, academic) into markets that are susceptible to

rapid declining and collapse.standards, implementers, academic)

• Product integration is sometimes faulted by customers

• Premium pricing strategy can be threatened by competition

• Loss of premium pricing could threaten R&D

ConclusionsEMC’s Third-generation R&D

approach serves it well in its

strategic imperative to be a

technology leader.

• Demonstrable close coordination of R&D and corporate strategy

(CTO reporting to EVP for Strategy)

• Demonstrable close coordination of R&D and marketing

• Blended strategy of centralized-decentralized development•

• Technology management constantly resolving “buy vs. build”

decision when evaluating investments

VMWare

Vplex

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Strong

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Symmetrix CelerraClarion

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Weak

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Base Key Pacing

Competitive Impact

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