Critical.
Authoritative.
Strategic.
Subscribe to CIO Magazine »

EMC's Tucci admits overpaying for RSA

EMC CEO Joe Tucci Friday said he pleads guilty to "some overpayment" in the company's US$2.1 billion acquisition of RSA Security last year

EMC CEO Joe Tucci Friday said he pleads guilty to "some overpayment" in the company's US$2.1 billion acquisition of RSA Security last year.

In a frank and open dialog with media in Sydney, Tucci said he "probably" paid too much for RSA but as far as acquisitions go there is always some sort of premium paid.

"It's [RSA Security] market value at the time was around $1.6 billion and we paid $500 million more than that but it was a very competitive bidding process which came down to us and one other party," he said while not disclosing the other party.

Responding to analysts claims the acquisition was over-priced, Tucci said he is confident these same market analysts will change their tune in the future.

"Time will prove that RSA is a great asset and this was a great acquisition," he added.

"We have spent $7 billion in recent years acquiring technology; we will grow our services organization through partnerships."

Tucci nominated Accenture and EDS as examples of partnering opportunities to build the company's services capability.

Tucci said the RSA acquisition is a good fit describing EMC as an infrastructure company.

"We operate the company in two parts; there is virtualization infrastructure and information infrastructure," he said adding that there will be plenty more acquisitions throughout the year but they will be much smaller, certainly not in the league of RSA or Documentum.

"Revenues will be north of $12.7 billion this year with the bottom line growing close to 20 percent."

The Australian market, he said, is growing faster than the rest of the globe and local revenues are "meaningful."

While unwilling to breakdown local revenue figures, Tucci said EMC Australia will have 1,000 staff by the end of the year.

With growth here expected to remain strong, Tucci said going forward he will be visiting Australia every 12 to 18 months.

One area undergoing significant change is the data center with Tucci claiming it will change dramatically over the next two years as a result of service oriented architecture (SOA) and virtualization.

"Infrastructure will be more dynamic and resources better utilized; in the next five years the majority of infrastructure will be virtualized, you can't stop gravity and that's the way gravity is going," he said.

Tucci said the gem in EMC's crown is VMWare as the spotlight is on virtualization.

EMC is planning to offer 10 percent of VMWare in an initial public offering mid-year.

"I always knew I was going to do this [the IPO] but everything is about timing and the market is really heating up right now," he said adding that when EMC bought VMWare in 2004 it had 300 staff.

Today, VMWare has 3,000 staff and the company has more than 20,000 customers with more than 10 per cent of new x86 workloads running on VMWare software.

Revenue from the EMC subsidiary was up 83 percent in 2006, totalling $709 million.

Tucci said this will reach well over a $1 billion this year.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

More about: Accenture, Billion, CROWN, Documentum, EDS, EMC, RSA, RSA, The Security Division of EMC, VMware

Comments

Post new comment

The content of this field is kept private and will not be shown publicly.
Users posting comments agree to the CIO comments policy.
Login or register to link comments to your user profile, or you may also post a comment without being logged in.
Related Whitepapers
Latest Stories
Community Comments
Latest Blog Posts
Whitepapers
  • Leveraging the Service Catalog to Scale Your MSP Business
    When assessing an MSP’s maturity and prospects, one question provides more insights than any other: “What’s in your service catalog?” A well-defined service catalog can set the framework for growth. The lack of a service catalog can significantly impede an MSP’s ability to scale. This paper explores why the service catalog is so vital, and provides some practical guidelines MSPs can apply in order to ensure their service catalog provides maximum utility and benefit.
    Learn more »
  • Eight threats your antivirus won’t stop - Why you need endpoint security
    News headlines are a constant reminder that malware attacks and data loss are on the rise. High-profile incidents that make big news might seem out of the ordinary. Yet businesses of every size face similar risks in the everyday acts of using digital technology and the Internet for legitimate purposes. This paper outlines eight common threats that traditional antivirus alone won’t stop, and explains how to protect your organisation using endpoint security.
    Learn more »
  • Magic Quadrant for Managed Print Services, Worldwide
    Gartner's managed print services (MPS) Magic Quadrant is a useful starting point for identifying and evaluating MPS providers. It is intended for Gartner's client base of mainly midsize and large organisations, many of which operate throughout two or more regions, and some of which are truly global. Although not all MPS projects are multiregional or global at the outset, customers often choose to scale up one region at a time. In this way, they can manage their office printing in a unified manner globally. Read more.
    Learn more »
All whitepapers
rhs_login_lockGet exclusive access to Invitation only events CIO, reports & analysis.
Recent comments