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EMC turns corner in Asia, plans push into new markets

EMC turns corner in Asia, plans push into new markets

EMC hopes to take Asian market share from rivals and expand into new market segments during 2008.

EMC's Asian operations are back on track after sluggish growth during early 2006, and the company aims to take Asian market share away from rivals and push into new market segments.

"We went from worst to first," said Steve Leonard, president of Asia-Pacific and Japan, explaining that Asia went from being EMC's slowest-growing region in 2006 to its fastest in 2007.

EMC's Asia-Pacific revenue grew 24 percent during 2007, hitting US$1.46 billion. By comparison, revenue from Asia grew by just 6 percent during 2006, which was lower than previous years and far slower than EMC's growth in other regions during that period.

Gartner and IDC pegged Asian storage revenue growth at around 23 percent during the third quarter, the most recent period for which figures are available.

"We see EMC very well placed as a storage vendor in Asia," said Avneesh Saxena, group vice president of systems, storage and software research at IDC Asia-Pacific, citing EMC's improved channel relationships and "software-driven approach" to developing storage products. "They aren't just selling boxes," he said.

Even so, taking storage market share away from rivals won't necessarily be easy for EMC, Saxena said, noting IBM and Hewlett-Packard are firmly entrenched in key Asian markets.

EMC's turnaround is largely a credit to Leonard, who was hired in 2006 and given the job of transforming its Asian operations.

Getting the company back on track in Asia involved a variety of steps, including shaking up the company's sales teams and building stronger ties with channel partners. EMC also embarked on an aggressive expansion in India and China to spur growth in these markets and tap into the vast pools of engineering talent there.

"We effectively had zero software-engineering capabilities resident in China during the summer of 2006. I was just up in Beijing and we are going to hire our 1,000th engineer this quarter," Leonard said.

Looking ahead, EMC is counting on new products that tap user demand for information storage, content-management capabilities, and security to spur further revenue growth in Asia. In a break with EMC's traditional sales focus on large corporations and organizations, the company also plans to expand into new markets, offering storage products and services for small business and even consumers.

At the top end of the market, EMC hopes to generate more sales with a line of flash memory-based drives, announced last month, designed to replace some disk drives in the company's Symmetrix storage arrays.

"EMC is in a very high innovation cycle right now. It's been bringing more things out to the market than at any moment in its history," Leonard said.

While the woes of early 2006 are now history for EMC, the company still faces challenges in Asia. In particular, Japan remains a difficult market.

EMC is working to improve its Japanese operations, but it will take time for these efforts to yield the desired results, Leonard said, calling the company's transformation there a "work in progress."

"We've had dozens and dozens of meetings with executives from leading Japanese companies, essentially to say, 'We're committed to being a better local company, we're asking for your support," he said.

As part of these efforts, EMC turned to sport to help raise its profile in Japan. The Massachusetts-based company is sponsoring the Boston Red Sox baseball team's upcoming March visit to Japan and will use the occasion to woo prospective customers and partners. Baseball is very popular in Japan and Red Sox pitcher Daisuke Matsuzaka is a celebrity in his home country, where he played professionally for several years.


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