Traditional Data Storage Companies Start to Play in the Software-Defined Storage Market: Expert Analyst Amit Daryanani Discusses the Competitive Landscape Within the Data Storage Space

Wall Street Transcript

67 WALL STREET, New York - September 18, 2013 - The Wall Street Transcript has just published its Data Hosting Centers and Data Storage Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Data Hosting Centers - Flash Memory - Cloud Computing Secular Trends - Data Center REITs - Colocation, Managed Hosting and Cloud Computing - International Enterprise and Consumer Demand

Companies include: EMC Corporation (EMC), NetApp, Inc. (NTAP), Hewlett-Packard Company (HPQ), Dell Inc. (DELL), International Business Machine (IBM), Western Digital Corp. (WDC), Seagate Technology (STX), Tyco Electronics, Ltd. (TEL), Amphenol Corporation (APH), Flextronics International Ltd. (FLEX), Jabil Circuit Inc. (JBL), Amazon.com Inc. (AMZN), Microsoft Corporation (MSFT), VMware, Inc. (VMW), Oracle Corp. (ORCL), STEC, Inc. (STEC) and many more.

In the following excerpt from the Data Hosting Centers and Data Storage Report, an expert analyst discusses the outlook for the sector for investors:

TWST: How are the broader industry trends translating to stock valuations and investor interest today?

Mr. Daryanani: I'd look at it in two different ways: One is the traditional data storage companies that I cover, like EMC and NetApp, and the other would be the hard disk drive companies like Western Digital and Seagate. With the traditional data storage companies, EMC and NetApp, everyone is very cognizant of this secular growth in data being a tailwind.

The investor concern has started to come up to the extent that maybe that data won't be stored in a EMC or NTAP storage array, but end up getting stored in Amazon Web Services or a public cloud that doesn't really use the traditional EMC or NetApp boxes. That's probably the one negative or concern, if you will, on the traditional data storage companies.

The other one has been the prevalence of software-defined data centers, and very specifically software-defined storage, where you could potentially just go buy a bunch of drives from Western Digital or Seagate and just want storage as a software layer. In that instance someone like EMC could feasibly just sell the software, but not the hardware attached with it. So those are the two concerns I think that are bringing down the valuation of both EMC and NetApp.

The positive side that's helping them out is they both have become very shareholder-friendly in terms of initiating dividends and having a buyback program, so that provides some support. And the second thing that you have is both these companies are starting to play in the software-defined storage market as well, so they have their own sort of solution that should help prevent any of those headwinds.

Net-net, I think the public cloud concern is the big overarching concern people have with the traditional data storage companies like EMC and NetApp, which we think is probably overblown...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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