NEW YORK (TheStreet) -- The degree to which enterprise IT spending recovers this year remains unclear. However, as companies look to position their business toward the cloud, "Big Data" is projected to take up a meaningful portion of corporate expenses. It's unavoidable.There will be a host of names such as IBM ( IBM) and Hewlett-Packard ( HPQ) that are vying for that business. But when it's all said and done, only two will produce market beating performances. Investors want to know if the market can support them both. EMC ( EMC) Market leader EMC finds itself in an unfamiliar position -- having to prove it deserves to lead. The company has been a solid tech play for quite some time. Its problem has always been its lack of sex appeal. The stock has lost roughly 20% over the past couple of months, which has now placed it in value territory. Investors want to believe again. But EMC must first prove its Q3 was an aberration. For the period ending in September, EMC reported net income of $626.3 million, or 28 cents a share on revenue of $5.28 billion. EPS and revenue climbed 3% and 6% respectively. However both missed analysts' estimates of 42 cents a share on revenue of $5.46 billion. Considering the tough macro condition, EMC's miss was not much of surprise. In fact, despite the miss, the company continues to grow its core business with 3% and 2% growth respectively in its storage and network storage segments. Likewise, that its high end storage segment produced 5% growth suggests that despite market headwinds, customers still appreciate EMC's superior technology. Unfortunately, this was not enough to improve gross margins, which also missed estimates. If there was one bright side during the quarter, it was with virtualization giant VMware ( VMW), which is majority-owned by EMC. VMware reported numbers that topped analysts' estimates as the company continues to grow at a 20% rate despite the economic slowdown. EMC's report could have been much worse. The miss was a disappointment. But sales are still growing -- albeit slower than usual. Management was able to make the best out of a bad situation. The quarter also indicated that that company remains a dominant "Big Data" power. Investors would do well buying at current levels as the stock is poised for 25% surge to $30 at some point this year.
NetApp ( NTAP) Entering this year, I've wondered whether NetApp will remain an independent company beyond 2013. Although EMC has gotten the majority of the press coverage, it is NetApp that continues to be the subject of M&A speculation. And if the company continues to produce as it did in its second quarter, M&A will no longer be just mere speculation. In the most recent quarter, NetApp reported net income of $236 million, or 63 cents per share on revenue of $1.54 billion. Revenues increased 2% year-over-year and improved by 7% sequentially. Not exactly robust numbers, but they were in line with estimates and mirrored EMC's production. But unlike EMC, NetApp showed better profitability. The company improved gross margins sequentially by half of a point. Too, operating margins produced a significant sequential improvement -- jumping 54%. While this means the company is doing well managing costs, how long can it keep this up? EMC will soon demand that NetApp makes capital investments in areas to grow. But investors rejoiced over the report. Since reaching a recent low of $26, the stock has been up 30%. This means despite lingering questions, the Street is still willing to give the company the benefit of the doubt. With enterprise spending expected to rebound this year, I have Cisco ( CSCO) and Oracle ( ORCL) at the top of my list of M&A candidates. Investors should not be surprised if a name like IBM, which has seen its storage business decline by double-digit percentage points, enters the mix of M&A chatter. In the meantime, there will be opportunities for NetApp to prove that its current valuation today is a steal. I expect the stock to trade at $40 by the second half of this year. At the time of publication, the author held no position in any of the stocks mentioned. Follow @rsaintvilus This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.