EMC reports sales up, but customers dragging heels
Storage is a predictable need; have you ever heard anyone say they need less of it? That has long been EMC's pitch to Wall Street — that demand for its storage hardware and software is ever reliable. The earnings news from the company is mixed: Customers are still buying, with revenues up 17 percent to $3.5 billion, but buyers in the U.S. are taking longer to make up their minds and sign purchase orders. Rational caution, or a sign of trouble ahead? EMC CEO Joe Tucci, in a conference call, acknowledged that the environment was "tough," but stood by his earlier forecasts. If EMC's customers continue their delaying tactics, they may prove Tucci overconfident. At some point, his salespeople will bow on price to seal deals and make their quotas. Storage may be a necessity, but EMC's profit margins, which rose to 15.8 percent in the quarter, are not.