Cloud Computing, Big Data and EMC’s Impressive Quarterly Results

Cloud Computing, Big Data and EMC’s Impressive Quarterly Results

One of my recent articles explored the idea of cloud computing contributing to lower margins at Microsoft (See: Can Cloud Computing Be Bad For Microsoft?). While that may still be true with respect to Microsoft’s highly profitable MS Office suite, recent developments have showed how cloud computing has contributed to several storage giant EMC’s impressive quarterly results.

EMC reported Q4 of $832 million, or 38 cents a share, on revenue of $5.6 billion, up 14% from a year ago. Non-GAAP earnings were 49 cents a share. Wall Street analysts had predicted non-GAAP earnings of 46 cents a share on revenue of $5.49 billion. A lot of this growth can be attributed to the increasing popularity of cloud computing, with EMC-subsidiary VMware, which it acquired in 2004 for $625 million and is one of the leading lights of virtualization, announcing record numbers as well.

EMC had a strong and record-breaking 2011. There’s no doubt that cloud computing is completely transforming the IT industry and that Big Data promises to have a similarly profound effect on transforming the way we work and live,” said Joe Tucci, CEO of EMC. Paul Maritz, CEO of VMware offered similar thoughts while stating that“Q4 provided a good end to a good year.” Predicting further growth this year, he added, “2012 will be the year in which we expect our customers to accelerate beyond virtualization and operate in a cloud-like manner.”

The term “Big Data” has recently become quite popular and refers to datasets that grow so large that they become awkward to work with using on-hand database management tools (Wikipedia). According to “The Pathologies of Big Data,” one feature of big data is the difficulty working with it using relational databases and desktop statistics/visualization packages, requiring instead “massively parallel software running on tens, hundreds, or even thousands of servers.” And it is evident that cloud computing can provide this kind of infrastructure at minimal cost.

With information being generated at an exponential rate every day, this is a rapidly “expanding” field, pun intended. In fact, VC Accel Partners, one of the major investors in Facebook, sees so much potential in this field that it has a dedicated Big Data Fund to invest in companies dealing with large-scale data management. It had recently led a $52.5 million funding round in startup Code 42.

The shift towards the cloud is also evident in Microsoft’s declining sales from Windows and growth in server sales. Microsoft’s Server and Tools business grew 11% year over year, boosted by double-digit growth in Windows Server and SQL Server premium, while revenue from Windows and Windows Live division was down 6%. However, all is not lost in the PC market if Microsoft CFO Peter Klein is to be believed. “In terms of PCs, there’s still growth, we’re still in the refresh cycle. Emerging markets will continue to drive PCs,” he said in a conference call.

By Sourya Biswas

sourya

Sourya Biswas is a former risk analyst who has worked with several financial organizations of international repute, besides being a freelance journalist with several articles published online. After 6 years of work, he has decided to pursue further studies at the University of Notre Dame, where he has completed his MBA. He holds a Bachelors in Engineering from the Indian Institute of Information Technology. He is also a member of high-IQ organizations Mensa and Triple Nine Society and has been a prolific writer to CloudTweaks over the years... http://www.cloudtweaks.com/author/sourya/

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