EMC Manages Revenue Record

January 5, 2006: In a salvo of Q1 news EMC 'rebalances' its global workforce, spends US$30-million on Grid-based software and predicts record US$9.5-billion 2005 earnings after a $2.7-billion Q4 revenue rush.

Prior to a full announcement of its 2005 earnings to be made on January 24 (USA time), EMC Corporation is expecting to announce a 17% rise on revenues year-on-year from 2004. This will include the costs incurred in the acquisition of Captiva (US$14-million) which was closed on December 30th 2005, among other write-downs.

Included in these costs will be US$80-million for 2005-Q4 as a set aside to "cover the cost of employee separation benefits". This figure is related to the 1,000 job 'rebalancing' of employees within the organisation which was announced alongside the multi-billion-dollar revenues.

Australian EMC
Speaking to IDM today in relation to the ANZ operation, EMC's Selena Adams, told us that the rebalancing:"… is a global strategy and we are not breaking this down by country. These are not layoffs, they are normal attrition combined with identifying overlaps." According to EMC Corps' director of public relations, Michael Gallant, despite the 1,000 personnel changes, EMC plans to increase its workforce by the end of 2006.

It is expected that the majority of the workforce 'overlaps' will come from staff of the Legato and Documentum 2003 purchases.

Whether this looks like an enticing New Year for employees of Acxiom Corp will be seen as the year wears on. According to EMC's press release of January 5th, the two companies: "…announced a technology and distribution partnership combining Acxiom's grid technology with EMC's storage, information management and resource management solutions.

"EMC has also acquired Acxiom's information grid software for an aggregate $30 million, which was initially developed to meet the information management and time-to-market needs of Acxiom and its clients."

This follows Acxiom's December 20th rejection of US-based corporate investment firm, ValueAct Capital's all-cash offer for all the shares it does not already own. With 11.75 per cent of Acxiom already in its control, ValueAct is already the majority shareholder.

EMC's purchase of US$30million purchase of Axciom's core software will still allow the originators use of the code. However, it is expected that the two companies will grow closer as 2006 comes to a close itself. The purchase of Axciom's key asset brings EMC's spending on acquisitions since 2003 to a mighty US$4billion. Aside from Documentum and Legato, other entities to come under the EMC wing include virtualisation expert VMWare, and back-up software specialist, Danz.

Comment on this story

Related Article:
Storage Software Market Continues Strong Growth