Archive for December, 2011

EMC; where is it going?

December 25th, 2011

EMC has expanded rapidly from a simple storage company, but to fulfil its potential it must integrate its many acquisitions and overcome the challenges of commoditisation and increasing competition in the storage market.  Having a quarter of the market gives EMC a lot of muscle, but even if the firm itself doesn’t think it has an identity crisis, the market does. After all, it is not the same company as it was even a year ago.

Before CEO Joseph Tucci took the helm in 2001, EMC was a one-trick pony. It made a healthy profit selling the Symmetrix hard drive array, but under Tucci’s leadership, it expanded into a diversified hardware, software and services company, just as other firms such as Cisco and HP have done.

Today EMC faces multiple challenges, not least of which is the commoditisation of storage and the gradual encroachment of other suppliers on its key turf. But those who ignore what the company has done in the past 10 years risk being blinkered to its future potential. EMC has expanded from a simple storage company to a firm that supports several of ITs major pillars. Identifying these pillars was insightful enough.  But buying and nurturing the companies that were at the forefront of those markets was gutsy and smart.

Yet EMC needs to work out where it want to go. The market has associated EMC with storage for over 30 years. Does it really want to be a storage company anymore? If not, then what will it be tomorrow?

Logica is cutting 1300 jobs

December 18th, 2011

Logica is cutting 1,300 jobs as it tackles the consequences of slow European growth due to the downturn. Lower than expected profitability of some of its longer term contracts is making an impact on the business. It has recently become clear that many of its clients are delaying short term expenditure and reducing discretionary investments to weather an uncertain economic future.

Logica said it would be incurring a one-off charge of £39m in 2011 to cover the expected lifetime contract losses as a result of the likelihood of lower expected revenue on a small number of volume-dependent contracts with between four to six years still to run.

The company will make greater use of automation and off-shoring in its infrastructure management business, leading to the loss of 450 positions in Sweden and the UK. A further 550 jobs are expected to go in the Netherlands and Belgium due to the lower demand for IT contracts in these regions.