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Table of Contents
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management's Discussion and Analysis ("MD&A") of Financial Condition and Results of Operations should be read in conjunction with our
consolidated financial statements and notes thereto which appear elsewhere in this Annual Report on Form 10-K.
All dollar amounts expressed numerically in this MD&A are in millions.
Certain tables may not add due to rounding.
INTRODUCTION
We manage our business in two broad categories: EMC Information Infrastructure and VMware Virtual Infrastructure.
EMC Information Infrastructure
Our EMC Information Infrastructure business consists of three of our segments: Information Storage, Information Intelligence Group and RSA
Information Security. The objective for our EMC Information Infrastructure business is to simultaneously invest in the business, increase our market share
and improve our profitability. During 2010, we continued to invest in expanding our total addressable market opportunity through internal research and
development ("R&D") efforts and acquisitions to capitalize on the continued growth of enterprise data. Additionally, because of these investments, we believe
we are well positioned at the intersection of two trends in Information Technology ("IT") – Cloud Computing and Big Data. Cloud Computing leverages an
on-demand, self-managed, virtualized infrastructure to deliver IT-as-a-Service in a more efficient, flexible and cost-effective manner. While the fundamental
transition to Cloud Computing architectures is only in the early stages, we believe our offerings are well suited to capitalize on this trend as it unfolds over the
next several years. Big Data, which is a primary contributor to the staggering pace of data growth, refers to the large repositories of corporate and external
data, including unstructured information created by social media and other web repositories. The tools and platforms surrounding Big Data require new
approaches and capabilities to handle these data sets, particularly in managing the associated analytics that unlock the value contained within the massive
amount of data. With the investments we made by acquiring Isilon and Greenplum, as well as our internally developed Atmos offering, we believe we are
well positioned in this market.
Through a combination of reinvesting for growth and growing faster than the markets we serve, we believe we will be able to increase our 2011
earnings at a rate faster than the rate at which we will grow our revenue and reinforce our position as the provider for enterprise data, cloud infrastructures and
Big Data solutions.
VMware Virtual Infrastructure
VMware's current financial focus is on long-term revenue growth to generate cash flows to fund its expansion of industry segment share and evolve its
virtualization-based products for data centers, desktop computers and cloud computing through a combination of internal development and acquisitions.
VMware expects to grow its business by broadening its virtualization infrastructure software solutions technology and product portfolio, increasing product
awareness, promoting the adoption of virtualization and building long-term relationships with its customers through the adoption of enterprise license
agreements. Since the introduction in 2009 of VMware vSphere and VMware View 4, which is compatible with VMware vSphere, VMware has introduced
more products that build on the vSphere foundation. In the third quarter of 2010, VMware released updated versions of VMware vSphere and VMware View,
and VMware plans to continue to introduce additional products in the future. Additionally, VMware has made, and expects to continue to make, acquisitions
designed to strengthen its product offerings and/or extend its strategy to deliver solutions that can be hosted at customer data centers or at service providers.
RESULTS OF OPERATIONS
Revenues
The following table presents revenue by our segments:
Percentage Change
2010 2009 2008 2010 vs 2009 2009 vs 2008
Information Storage $ 12,699.1 $ 10,659.4 $ 11,632.3 19.1% (8.4)%
Information Intelligence Group 735.9 739.6 785.6 (0.5) (5.9)
RSA Information Security 729.4 606.0 581.3 20.4 4.2
VMware Virtual Infrastructure 2,850.7 2,021.0 1,876.9 41.1 7.7
Total revenues $ 17,015.1 $ 14,025.9 $ 14,876.2 21.3% (5.7)%
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