EMC Expects Record Revenue, Plans to Axe Heads

EMC Corporation -- an Enterprise CMS, and information management and infrastructure vendor -- announced that it expects an all-time quarterly revenue record for its Q4 2008. The preliminary results show expected revenue of approximately US$ 4 billion, which is approximately 8% revenue growth over Q3 2008, and 4% growth over the same period a year ago.

On the not-so-optimistic side, EMC also announced its plans to cut as many as 2,400 jobs, representing approximately 7% of its entire workforce.

Closer Look at the Positive Numbers

In the fourth quarter, EMC expects:

  • GAAP earnings per diluted share of US$ 0.13 to US$ 0.14
  • Non-GAAP earnings per diluted share of US$ 0.23 to US$ 0.31, depending on different scenarios

"We are very pleased with our preliminary Q4 financial results," said Joe Tucci, EMC chairman, president and CEO. "We were able to generate all-time record revenue and strong sequential revenue growth against the backdrop of a challenging global economy."

With IT departments investing into infrastructure, storage and virtualization solutions more than ever; the growing revenue that EMC is experiencing only makes sense.

Bad News for Some EMC Employees

While we are all giddy about EMC’s Q4 2008 expected revenue numbers, we are also sad that EMC announced its intention to layoff (fire, downside – choose the one you like) about 2,400 people in 2009. This is about 7% of the entire EMC workforce (headcount as of September 30, 2008).

"To improve the competitiveness and efficiency" of its global business, EMC has announced a restructuring program. From what we know now this “streamlining” initiative will mostly affect EMC’s global Information Infrastructure business. But this doesn’t include VMware. VMware, as before, is the profitable arm for EMC.

The transformative initiatives will include the consolidation and movement of various facilities and processes beginning in 2009 and to be completed by the end of 2010.

Enterprise CMS Landscape – Financially

It is starting to sound really annoying every time we say “this tough global economy.” But this is the reality of life. Many ECM vendors are looking closer at their balance sheets and making unpopular decisions like layoffs.

Vignette, for example, has been struggling for a number of quarters now, and has laid off an unconfirmed number of employees right before Christmas last year, as reported by Austin’s Statesman. Vignette could either end up being a prime target for an acquisition, or will face more restructuring and transformation. VIGN does have a pretty extensive Enterprise CMS products portfolio suitable for certain scenarios.

Interwoven, on the other hand, continues to be doing just lovely on the financial front, expecting to report total revenues of about US$ 70.0 million, with license revenues of approximately US$ 26.5 million, for Q4 2008.

So, what is exactly going on in the Enterprise CMS space? Too many guesses, too many predictions, too many outcomes are possible. In the end, the strongest shall survive.