Last night EMC Chief Executive Joe Tucci laid out his view of where the information processing world is going over the next decade and where EMC will focus. His primary point was cloud computing is the future and big data is the killer app for the cloud. He laid out the history of big transitions in our industry and argued the big discontinuities were always driven by a killer application. He sees the cloud as the next big and important transition for our industry.
This talk was presented as part of the University of Washington Distinguished Lecturer Series. With six TV cameras covering the action, there were nearly as many as some University of Washington Huskies games and it was well attended. The next talk in the series will be Bill Gates on October 27 presenting The Opportunity Ahead: A Conversation with Bill Gates. I’ll be presenting Internet Scale Storage on November 1st.
If you are interested in any of the talks in the series, all are open to the public and the upcoming schedule is posted at: http://www.cs.washington.edu/news/newdlshome.html.
The most notable statistic from the Joe Tucci talk was the massive investment that EMC is making mergers and acquisitions. He said over the next 5 years, EMC will spend $10.5B in R&D – this number alone is amazingly large — but what I found really startling was they expect to spend even more purchasing companies. They expect to spend $14.0B on M&A during this same period. That’s nearly $3B/year from just a single company. Amazing.
With many large companies increasingly looking to the startup community for new ideas and innovation, there is incredible opportunity for startups. Joe emphasized the opportunity, saying that Washington in general and especially the University of Washington will likely be the source of many of these new companies. As large companies lean more on the startup community for new ideas, products, and services, it’s a good time to be starting a company.
My rough notes from the talk:
· IDC reports:
o This decade WW information content will grow 44x (0.9 zettabytes to 35.2)
o 90% unstructured
· Big data has arrived
o Mobile sensors
o Social media
o Video surveillance
o Smart grids
o Gene sequencing
o Medical imaging
o Geophysical exploration
· 73% maintaining existing infrastructure (true for 10 years)
o JRH: I’ve heard this statistic before but it seems like nearly has to be the case the most companies are spending at least 3/4s of their investment continuing to running the business and around a ¼ on new applications. The statistic is usually presented as a problem but it feels like it might be close to the right ratio.
· 3D movie is about a petabyte with all camera angles and footage included
· The average company is attacked 300 times per week
o All CIO say this is way light – my home router gets nailed that many times in a good hour
· IT staffing will increase less than 50% in next 10 years but the data under management will grow faster.
o JRH: Again this seems like the desirable outcome where the data under management should be able to grow far faster than administrative team
· EMCs Mission: To lead customers towards a hybrid cloud
o Leading customers to x86 based private clouds and hybrid clouds
o Burst, test & development, etc. into the public cloud
o Hybrid cloud between private and public is the “big winner”
· VM is basically a cloud operating systems
o EMC still owns 80% of VMWare
o There are now more than virtual machines shipped than physical machines
o 62% virtualized out of the gate
· Applications like SAP, Oracle, and Microsoft are now available in the cloud
· Killer app for the cloud is big data
o Real time data analytics
· New end user computing
o IOS devices, android, windows, …
· Tenets of cloud computing
o Efficiency, control, choice => Agility
o Control through policy, service levels, and cost
· Big competitors
o IBM, HP, Cisco, Microsoft, …
o EMC is big at $20B but not close to as big as these incumbents
o JRH: I’ve never thought of EMC as the small, nimble competitor but I guess it’s all relative
· Recent acquisitions in drive to cloud & big data
· Mammoth 5 year M&A plan: roughly ½ of investments in R&D and ½ in M&A
o 14.0B M&A
o 10.5B: R&D
· EMC has 14,000 sales people so there is huge potential synergy in any acquisition
o Adding a 14,000 person sales team to any reasonable product is going to produce considerable new revenue quickly
· EMC is now 152 in fortune 500
o Revenue is $17B
o Free cash flow: $3.4b
Thanks to Ed Lazowska for hosting this talk and many in the University of Washington Distinguished Lecturer Series.