EMC Corporation of Hopkinton, Massachusetts is creating three separate business units as the largest maker of data-storage systems seeks to restore profitability after reporting its first quarterly loss in almost 12 years.
One unit will integrate all of the company’s hardware engineering and manufacturing and another will develop software products, an area that chief executive Joseph Tucci has said is a key to restoring profit, said spokesman Michael Gallant. The third unit will consolidate customer sales and services.
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EMC gets more than half of its revenue from hardware and about 20 percent from software. Profit from storage equipment is falling as rivals such as International Business Machines Corp. and Hitachi Ltd. cut prices, forcing EMC to do the same. Tucci wants to boost software to 30 percent of sales by 2003 because profit margins are more than twice as wide as those for hardware.
“The new organization fits extremely well with the company’s new strategy,” said David Bailey, a Gerard Klauer Mattison analyst, who rates the shares, which he owns, a “buy.”
