EMC may shift SEA focus to Malaysia and Indonesia next year
By Goh Thean Eu November 3, 2014
- In 2014, focused more on emerging markets like Vietnam, Myanmar and Sri Lanka
- Expects ‘significant’ demand from financial and telco sectors in Malaysia, Indonesia
MALAYSIA and Indonesia are expected to be the main focus for EMC Corp’s South-East Asia business next year, with the storage systems provider looking at increasing its investments into these two markets.
In 2014, EMC focused its investments more on Vietnam, Myanmar and Sri Lanka – the last of which, while not located in the region, still falls under the company’s South-East Asian operations, said EMC’s president of South-East Asia Tom Zack (pic).
“The investment focus for 2014 was more on emerging markets. So we were putting people into Myanmar, we invested significantly into Vietnam, and put more resources into Sri Lanka,” he told Digital News Asia (DNA) in Kuala Lumpur recently.
With the year coming to an end, Zack now needs to decide where he is going to “place his bets.”
“When I look at next year, I will probably focus a little bit more on markets like Malaysia and Indonesia. There are still significant growth opportunities, and we are well represented in both markets,” he said.
The company would also be closely monitoring developments in Thailand – which is currently run by a military-controlled government, he added.
“If [the situation in] Thailand changes, if the economy picks up again, maybe I will invest more. It is a good market. We have a good team there, but it is hard to grow when the government is not spending a lot of money on IT,” he said.
However, he stressed that he had yet to make a final decision on EMC’s 2015 investments for South-East Asia.
Demand from telco, financial sectors
Hopkinton, Massachusetts-based EMC is perhaps the largest storage systems supplier in the world, but also offers products in the security, virtualisation, analytics and cloud space through subsidiary companies like VMware and Pivotal. Its storage products are marketed under a variety of brand names including VMAX, Isilon and XtremIO.
EMC It recently reported third-quarter 2014 consolidated revenue of US$6 billion, an increase of 9% year over year, and is expecting full-year consolidated revenue to hit US$24.5 billion.
In a statement, it said consolidated third-quarter revenue from North America grew 8% year over year, representing 55% of consolidated third-quarter revenue. Revenue from EMC’s Europe, Middle East and Africa region grew 15% year over year, while Asia Pacific and Japan grew 4% year over year and Latin America grew 1% year over year.
Meanwhile, Zack said that when it comes to Malaysia and Indonesia, he expects a “significant portion” of demand to come from the financial and telecommunications sectors, with its VMAX product line likely to benefit the most.
“The banks and the telcos really like VMAX, our rich data services product.
“Banks don’t like it when there’s a problem and they can’t get access to information. So they want the highest level of reliability and visibility,” he said.
“VMAX is designed in such a way that the moment it powers on the customer’s data centre, it should never shut down.
“Even if you have multiple points of failure, multiple disc drive failures, or different controllers failing, VMAX is built so it has the resilience and redundancy to handle this and work around it,” he claimed.
Review of 2014 investments
Zack said that EMC’s 2014 investment in emerging markets was more about the longer-term.
“I view that as a three-year investment. I didn’t put those new resources thinking that I was going to get an immediate payback on investment within one quarter,” he said.
There are a few reasons why investments in emerging markets will take some time to see positive returns, he said.
The first is that it always takes time for new employees to learn about EMC and its customers – it would usually take about six months for new employees to be truly productive, according to Zack.
The second is that EMC has to build brand awareness so that it becomes known to potential customers.
“Last but not least, is that we have to build a channel ecosystem so that they have the capability to serve customers. These are the areas of investments we have made,” Zack said.
So far, most of its investments appear to be on track, with a few “surprises,” he added.
“My initial thinking was to focus on emerging markets in 2014, and maybe we will start to see some sort of return in the second half 2015 or 2016.
“In some cases, we had some surprises. Myanmar is one example. Initially, we expected to get a moderate number of small transactions in 2014. It didn’t happen.
“Instead, we have done very few transactions, but these are big projects. I didn’t expect that, it is a nice surprise,” he declared.
Still, Zack said it was important to let EMC’s new business ‘run by itself.’
“When I’m trying to build a new team like in Vietnam, I don’t ever find it effective to just always have new people joining. The team gets consumed trying to get people going, and they end up not going out and delivering.
“I believe one should put the resources in, and let it run for 12-24 months, depending on the market, and then reinvest again,” he said, noting that adding new people every quarter would only be a distraction.
With Zack considering putting more investments into growing the markets in Malaysia and Indonesia next year, would it mean that the company is looking at expanding its teams there? When that happens, would this too cause distractions?
“In Malaysia and Indonesia, we already have a significant presence. So, I can afford to put new people in at any time of the year,” he countered.
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