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Author: JillMiller Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 12284  
Subject: Re: Annual Meeting Date: 5/9/2002 8:49 PM
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This is my first post to this board. I'm a fairly new EMC stockholder, having bought in at 12.76 last Sept 20 (when I thought it would be at a low).

I too attended the annual meeting. This was my very first stockholders meeting ever; not just for EMC but for any company. So now I am no longer a virgin stockholder! <g> Here are my impressions. Apologies in advance if some of this sounds naive. It probably is.

Lots of security; photo ID required to get in; lots of Men In Black standing around with walkie-talkies. Lots of the attendees seemed to be aging nerds (like me). I even ran into an old colleague that I hadn't seen in years.

While several hundred to perhaps a thousand stockholders noshed on pastries and coffee before the meeting, fairly thumpy music played in the background while jazzy graphics played on a huge projection screen at the front of the hanger-like room. I would have preferred something more old-fogie-ish in the music department, but I guess the media types that put the show together were probably half my age. At least it was not disturbingly loud.

While I don't think I received a fancy Annual Report (just the 10-K), they obviously spent that budget for a fancy movie for us stockholders. In addition to the business part, aptly reported by sandhillroad, there were feel-good movies about how the Defense Information Systems Agency (DOD's IS support for the soldier in the field) uses EMC storage to make it possible for the commanding general to orchestrate the war in Afghanistan from Florida. http://www.tinkertakeoff.com/cgi-bin/NewsList.cgi?rec=1106&cat=Tinker%2BTake%2BOff

The DOD-DISA (not quite the right acronym) moved their storage to EMC's hardware (or was it that they doubled their use of its storage) after a tornado in 1999 just missed their command center in Oklahoma. http://www.gopbi.com/shared/weather/tornadotracker/53992_vtornado.html
They like EMC because they get lots of support.

After the movie, Reuttgers got up and went to some length to explain how they missed calling the downturn in sales due to having relied on an independent survey by IDS based on interviews with Fortune 500 companies which showed an expected growth rate of 14% for storage, whereas reality was a -18% growth. He pointed out that their cash reserves still grew last year and they are still gaining market share. He stated that "storage is the fastest growing segment of IT and they believe that they have the strongest management team amongst the competitors for that market."

Then Tucci took over to talk about what they are projecting for the future. Currently IT budgets are down and Capital spending is really down. EMC arrays are rarely sold "full up" so many companies have been simply adding small numbers of drives to their existing EMC hardware, or upgrading the drives to ones with larger capacity. In the past stoarge was often used to only 35-50% of capacity. As storage modules become used closer to capacity (past 85% capacity the efficiency goes down sharply) IT departments will start spending again. (Sounds good. I hope so.) There has been a price war on storage hardware. EMC's break-even point has been brought down to $1.55 billion (says my note, but it could have been $6.55). They believe that "by 2005, 75% of storage will be network storage". EMC is tuning the company to catch the growth in the future with 70% of R&D $$ going toward software which will interface with competitors' hardware as well as their own. The theory being, that if a company invests in their software, it is more likely to come back for their hardware when greater capacity is needed. While several competitors are approaching EMC on hardware, none are even close on software. Then he showed an interesting graph of the market for various technologies starting with mainframe & mini computer systems (peaked about 1980), PC's (peaked about 1995), Network-centric storage will peak about 2010, Content-centric storage (those X-rays and cancelled checks) are projected to peak around 2020. (About then he pulled the black shroud off the Centera unit on the stage.) They will also build a very small Clariion (gestures about knee high) for Dell, and added "this has not yet been announced".

So there you have it from my (admitedly sketchy) notes. I'm not saying I believe every word, especially predictions out to 2020, especially after they missed so bad on predictions one year out, but that's approximately what they said. I leave you to draw your own conclusions. Please share them!

--Jill
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