Acquisitions, R&D top EMCs growth agenda

Written by Kirtika Suneja | Las Vegas | Updated: May 9 2013, 08:24am hrs
In an attempt to boost innovation in technology, NYSE-listed EMC Corporation plans to spend almost a quarter of its revenues on research and development along with technology acquisition. The $21.7-billion firm is investing almost 12% of its revenue in R&D and another 10% in technology acquisition.

Consider this: The company spent more than $1.5 billion on R&D last year and has acquired at least five firms since 2011. Of the 60,000 strong headcount of the company, more than 13,000 are engineers.

We dont buy for market access but for technology and our commitment towards innovation. Moreover, most of our growth is organic with a little help from acquisitions,

EMC president and COO David Goulden said at the EMC World event.

EMCs cumulative investment stands at $16.5 billion since 2003 while it made acquisitions worth $17 billion over the same period and integrated more than 70 technology companies. With presence across 86 countries, the company has a centre of excellence (COE) in Bangalore and has committed an investment of $1.5 billion in India from 2010-2014.

The incremental investment in India is focused on three key areas expanding R&D infrastructure at the India COE, increasing EMCs capabilities at the centre and adding more technologists to support local customers and partners. EMC services more than 3,500 customers in India.

As for inorganic growth, EMC acquired Israeli flash-memory enterprise storage systems company XtremIOin 2012 while it bought Pivotal Labs in the services space.

On the other hand, it acquired online backup service company Syncplicity in 2012 which became its archiving and recovery arm.

We want to buy small companies with cutting edge technologies and add more products to our portfolio. We launched 43 products last year and expect the second half of this year to be richer in product announcements, added Joe Tucci, chairman and CEO, EMC.

In fact, recently GE bought a 10% stake in Pivotal by investing $105 million and entered into a broad research and development and commercial agreement wherein the former will develop a platform for the latter for its various industry verticals. GEs global software centre is working to develop a software platform that GE will deliver as a service to industrial customers in aviation, transportation, healthcare, energy and manufacturing.

Besides GE, Pivotal has signed a deal with an Indian conglomerate to develop a similar platform.

We are developing the substrate for GE on which they can write applications. As for India, our focus is threefold people who will directly work with us, the systems integrator community and Indian conglomerates which are turning into MNCs. We will help the initial set of customers to write applications with our service offerings, said Paul Maritz, CEO, Pivotal.

Pivotal clocked $300 million of revenues last year and has an employee strength of 1,250.

(Travel for this report was sponsored by EMC Corporation)