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Description
 EMC is an industry leader in the network storage industry. EMC’s products are associated with the management, migration, data disruption detection and storage of information. Their products and services are enterprise critical for many operators, as they manage mission critical applications and operations. Given EMC’s technology plays such a key role, it is difficult for their customers to switch providers. Furthermore, EMC’s specialist knowledge gives it ample know-how to introduce and sell complementary services and products which EMC either manufactures itself or are introduced through third-parties.

With the acquisition of VMware, EMC reinforced itself as the leader in the server virtualization software application business and its management. In this field, the most important competitors are Microsoft, Citrix, as well as a number of open source providers. The competition is however lacking market penetration for the time being. EMC excels in the high-end market segment;

Because of BCR  and the fact that their clients are technology savvy; the business prospects of EMS is and remains very visible.With the recent emergence of a range of start-ups which offer more efficient and easier to handle storage server applications, the competition for business is becoming fiercer. However, this is not really an issue or a threat to EMC. Rather, it represents an opportunity for EMC to reinforce its business model as it may lead to valuable acquisitions in terms of technology and clients.

Strengths and weaknesses analysis:
Strengths:

• EMC disposes of about USD 11 billion of free cash and generates an annual free cash flow of about USD 6 billion. These amounts are more than sufficient, firstly to cover an acquisition (if required), and secondly to continue spend on R&D for new in-house applications and services,
• The loyalty of EMC’s client base is high, and clients can often take advantage of high rebates and special offers,
• EMC’s potential clients are technology savvy; this enables EMC to enlarge the company’s client base at a rapid pace,
• The company’s business is built on 4 revenue streams.  

1. Storage and services: 72 %,  
2. VMware: 21 %, 
3. Information intelligence: 3 %,  
4. Information security: 4 %. 

Weaknesses:

• Because EMC cannot always develop the required technology in-house, it must, from time to time, acquire specific knowledge through the acquisition of entire companies. The purchase of Isilon and Data Domain were two such examples; for which  very high prices were paid, 
• In order to be less dependent on EMC’s services, more and more data centers are developing their own technologies to store data, handle security and manage data . This will rapidly reduce EMC’s market share. 

• With badly integrated acquisitions, the ROI of the company could easily suffer and disappoint for a number of quarters.- Recent revenue growth was at 1%. This figure is significantly below the expected long-term revenue growth rate of 5% to 8%. Is this failure a sign that EMC has reached the maximum number of clients with its present range of products? 
• The reduction in development costs for new products allows operators to run dual systems which will result in a market share reduction for EMC.

Investment profile and investment opportunity:
Operational risk: Below average
Expected sales growth: Above average
Investment orientation: Group “Global Strategies” and “Best-in-Class” investment themes (US technology)

BCR = Business continuity requirements