This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

EMC's ViPR Could Bite Amazon

Stocks in this article: AMZN EMC VMW NTAP

NEW YORK ( TheStreet) -- It still seems as if the Street is unsure of what to do with shares of storage giant EMC (EMC - Get Report).

Management has come out with lower-than-expected fiscal 2013 guidance, and uncertainty remains surrounding VMware (VMW - Get Report), which is 80% owned by EMC.

Although VMware is still the clear leader in the virtualization business, weak enterprise IT spending has taken a toll on its business. Consequently, VMWare's stock is down nearly 30% so far this year as the Street takes a wait-and-see approach.

Fairly or unfairly, these concerns have impacted how the market views EMC, which has seen shares slide 4% this year. This is while rival NetApp (NTAP - Get Report) has posted 11% gains. But I suspect all of this is about to change.

Earlier this year, Joe Tucci, EMC's chairman and CEO, who is one of the most underrated leaders on the market today, discussed his company's position on the market. He said:

"EMC remains squarely at the center of the most disruptive and opportunity-rich shift in IT history, propelled by the benefits of cloud computing, Big Data and trusted IT. These high-priority IT spending areas are core to our strategic focus and represent market segments where EMC has established leadership positions and competitive advantage."

Essentially, while the market was discounting EMC's prospects, management showed strong confidence in its capabilities.


It recently launched ViPR, a "software-defined storage" platform designed to provide IT departments and enterprises with a cost-effective and simple way to manage large data centers via the Web without sacrificing features.

With ViPR, EMC has responded to Amazon.com's (AMZN - Get Report) dominant cloud platform, known as Amazon Web Services, which had become the standard for IT departments looking for a low-cost way to shift their hardware and software data-center functions to the cloud.

As more companies migrated from local storage, this diminished the importance of EMC and its strength in "Big Data." It also raised questions about VMware's profit potential and the overall direction of the virtualization market.

But with ViPR, EMC becomes a formidable rival to Amazon, the Street understands why Tucci had spoken with such confidence a couple of months ago.


Given how widely regarded Amazon Web Services is, ViPR likely won't dethrone Amazon right way.

But I don't believe it has to. And it doesn't seem as if that is what EMC's management cares about. ViPR's support of third-party hardware and software, even from NetApp and Microsoft (MSFT), speaks to the level of self-belief that EMC has as a market leader.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,191.37 -195.84 -1.13%
S&P 500 2,002.16 -27.39 -1.35%
NASDAQ 4,637.9940 -43.5030 -0.93%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs