EMC has lowered its financial expectations and plans to cut costs, and some EMC partners -- while optimistic --...
are also preparing for a slowdown in IT storage spending.
During EMC's quarterly financial results call this week, the company revised its fourth-quarter revenue estimate from $4.14 billion to $4 billion. Executives promised to cut spending in underperforming areas and predicted a slowdown in IT storage spending through next year.
"It could be an opportunity for the channel if companies are trying to cut their costs to go to market," said Jack Kaiser, vice president of sales and marketing for International Computerware, an EMC partner in Marlborough, Mass.
Despite his positive outlook, Kaiser said he is seeing signs that the economic downturn is affecting IT storage spending. Customers are delaying purchases, and sales cycles are getting longer, he added.
"I haven't seen any projects that are totally off the table," he said. "We just have to work harder for some deals."
Mike Willard, co-founder and principal at Soccour Solutions, an EMC partner in Dallas, said some of his customers are also cutting their IT storage spending -- particularly those in retail, hospitality and other industries that typically get hit hardest in a poor economy. Solution providers that serve customers in a broad range of industries will be better able to weather the financial storm, Willard said.
"That's something that we're going to be able to benefit from," he added.
Willard said he's optimistic that the economy will recover soon, but Soccour is nonetheless planning for the worst-case scenario: 12 to 18 months of a down economy and cuts in IT storage spending.
And at International Computerware, "we're trying to be smarter about hiring, but we haven't slowed any," Kaiser said. "We're still doing events, and we're committed to making the business work."
EMC has not yet said where it will reduce spending, or by how much. Those decisions could have major effects on EMC partners, Willard said.
"It's really going to depend on where those costs are cut," he said. "I would like to see that when costs are cut, you turn your attention to your bread-and-butter products and really emphasize those opportunities."
Willard expects EMC to focus on its Symmetrix and Clariion lines and doesn't think sales of those products will suffer.
"Some of [EMC's] peripheral products are probably going to be hurt," he said.