EMC's Real and Virtual Progress

EMC Corp. posted record fourth quarter and full year financial results. Meanwhile, VMware Inc., a majority owned subsidiary of EMC, announced strong fourth quarter and fiscal financial results, and made generally available its VMware Virtual Desktop Manager 2.

Focal Points

• EMC reported all-time record revenue and profit growth for the fourth quarter and fiscal year 2007. Total revenues for the quarter increased 19 percent year-over-year to $3.83 billion. Net income for the quarter on a GAAP basis was $525.7 million or $0.24 per diluted share. This was 33 percent higher than comparable net income of $388.8 million, or 18 cents per share, for the same period last year, EMC added. Meanwhile, total revenues for EMC's fiscal 2007 rose 19 percent to $13.23 billion. Net income on a GAAP basis was $1.67 billion, or 77 cents per share. This was 43 percent higher than the GAAP earnings per diluted share of $0.54 reported for 2006.
• VMware reported very strong revenue and profit growth for the fourth quarter and fiscal year 2007. Total revenues for the quarter increased 80 percent year-over-year to $412 million. Net income for the quarter on a GAAP basis was $76 million or $0.19 per diluted share. This is compared to a net income of $37 million for the same period the previous year. Meanwhile, total revenues for VMware's fiscal 2007 rose 88 percent to $1.33 billion compared to 2006. Net income on a GAAP basis was $218 million, or 61 cents per diluted share. In contrast, in 2006 VMware had a net GAAP income of $86 million or 26 cents per diluted share.
• VMware enhanced its Virtual Desktop Infrastructure (VDI) solution with the new VMware Virtual Desktop Manager 2 which is now generally available. The new software allows users to securely connect to their virtual desktops in the data center and gives IT administrators an easy and cost-effective way to manage virtual desktops. Major industry leaders, including Dell Inc., Hewlett-Packard Co. (HP), IBM Corp., and Wyse Technology Inc., have extended VMware’s virtual desktop solution. The software lists for $150 per concurrent user. It can be purchased in a $1,500 starter edition for 10 users or in a $15,000 package for 100 users.

Experton Group believes EMC continues to demonstrate its ability to deliver on its innovation and vision, and to effectively leverage its acquisitions. 2008 will be a year when EMC drives to penetrate the consumer and small and medium business (SMB) markets with tailored information infrastructure management offerings as well as leverage all of its solutions in its usual markets. IT executives should understand EMC's solution strategies and road maps and determine how and where solutions such as those can be applied to enterprise challenges.