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  • SSFE1 SSFE1 May 7, 2001 4:52 PM Flag

    Seen This...

    Massachusetts-Based Data Storage Firm's New Chief Plays to Win

    HOPKINTON, Mass., May 06, 2001 (The Boston Globe - Knight Ridder/Tribune
    Business News via COMTEX) -- At sports-happy EMC Corp., chief executive Joseph
    M. Tucci is the new coach trying to restore the team's slowing momentum.

    The data-storage company is known for hiring college athletes and sponsoring pro
    golf tours, and the 53-year-old Tucci tends toward athletic metaphors to
    describe the mission of the company he joined 17 months ago.

    "This isn't the ballet, you know what I'm saying? This is rugby," he explains.

    The game has been taking its toll recently. EMC had disappointing first-quarter
    results and said it probably will miss a sales target for this year because of a
    worldwide fall-off in demand. And the tougher sales environment comes as
    competitors from IBM to Compaq are sharpening their focus on the EMC-led data
    storage equipment market.

    But Tucci, a former semipro baseball catcher who took over as EMC's chief
    executive in January, plays to win. And he's been shuffling his management
    lineup lately.

    Last month, Tucci named Frank Hauck as executive vice president for global
    sales, services and marketing, replacing Michael Ruffolo, who now will conduct
    strategic reviews. This week, the company plans to announce its senior vice
    president for new business development, David Donatelli, will take on additional
    marketing and strategy responsibilities. A previous vice president for
    marketing, Jack Garrahan, will move to London to fill a vacant job overseeing
    European operations.

    Tucci says the moves weren't prompted by EMC's financial setbacks. But in a
    recent interview at EMC's Hopkinton headquarters, as executives prepared for
    their annual shareholders' meeting this week, Tucci also made it clear the
    shakeup is part of a management strategy that emphasizes results.

    The approach is in keeping with that of Tucci's predecessor, Mike Ruettgers, now
    executive chairman. Salespeople and others who don't meet their goals can expect
    reassignment or perhaps a departure. Some who have left in the past say the
    process amounts to scapegoating individuals for broader difficulties.

    But a good leader, Tucci said, "has always got to keep an organization somewhat
    on edge." The management changes, he said, are only meant to refresh EMC and to
    broaden managers' experience.

    "I'm saying, for whatever reason, they're getting too comfortable or too flat.
    So I'm going to change" the lineup, he said

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    • Tucci was just as blunt when discussing EMC's marketing budget, which was
      slashed recently even as the company was starting an advertising campaign
      sources had said might reach $60 million this year.

      Now EMC will spend no more than half of that. The company will still back golf
      tournaments and auto races where it thinks it can reach senior managers who
      might buy its equipment, Tucci said. But he indicated the company isn't likely
      to put its name on any stadiums, since fans often don't adopt the new monikers.

      Referring to the new ballpark proposed for the Red Sox, Tucci said, "Whoever
      names Fenway, I bet you I'll be dead and buried before they refer to it as
      anything else but Fenway."

      With a market capitalization of more than $90 billion, EMC is the most valuable
      company based in Massachusetts and one of the largest employers. It produces
      devices housing scores of disk drives that store data for commercial customers
      like banks and airlines, and it sells software and services to manage the stored

      Tucci grew up outside Albany and played in a semiprofessional baseball league in
      Manhattan in his 20s before attending business school. He arrived at EMC at the
      start of last year as president and chief operating officer. Before that, he was
      chief executive of Wang Global, which he helped transform from a bankrupt
      mid-range computer maker into a technology-services company. In 1999, he
      arranged its sale to Holland's Getronics NV.

      The quarter ended March 31, Tucci's first as EMC chief executive, was a
      difficult one. On April 11, EMC said it had missed analysts' expectations for
      the first time in six years and it probably won't reach the $12 billion revenue
      target that Ruettgers had set for 2001. Other big technology companies might be
      glad to have EMC's problems. It still expects revenue to grow more than 20
      percent this year to roughly $10.6 billion, and to earn around 80 cents a share.

      EMC blamed a worldwide slowdown in technology spending, and said it expects
      customers will increase their orders again starting next year.

      Some outsiders propose harsh remedies. Steve Duplessie, senior analyst at the
      Enterprise Storage Group in Milford, thinks Tucci should sell all of EMC's
      hardware operations to focus on high-margin software. Chris Ely, portfolio
      manager at Loomis Sayles in Boston, said he's holding the stock for now and
      expects the price won't change much in coming months.

      "It's a big question right now: What's the real revenue and earnings-growth rate
      of this company over the short term?" Ely said. Shares in EMC closed at $41.30
      on Friday, down from a high of $100.98 last Sept. 20.

      Tucci said the stock price "will take care of itself" if EMC can take sales away
      from hardware competitors such as IBM and Hitachi, and from software makers like

      Another priority, Tucci said, is to make EMC "the absolute best place to work"
      to help it attract talent. That's important as EMC keeps hiring -- even as other
      companies lay off workers, EMC still plans to add jobs in Massachusetts this
      year. It had 8,500 employees in the Bay State at the end of 2000.

      This year, such perks as on-site child care programs helped land EMC on Forbes
      Magazine's list of the best 100 employers.

      There's no tension between increased worker satisfaction and EMC's macho
      culture, Tucci said, because EMC is filled with competitive personalities.

      Working there "is not for everybody, and we don't pitch it to everybody," he

      Those who do join up experience such rituals as a firewalk ceremony. There, new
      salespeople march barefoot down a 10-foot path of burning coals. Tucci said he
      took such a stroll last year to show he would lead by example.

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