By Daniel Shane
In an exclusive interview, veteran EMC Corporation chairman Joe Tucci tells Arabian Business why big data is worth the hype and why he is not hanging up his boots just yet.
For a man who leads one of the world’s biggest technology companies, Joe Tucci does not use a computer very often.
It speaks volumes about the emergence in recent years of cutting-edge mobile devices like Apple’s iPad, that even the chairman and CEO of EMC Corporation says he has been severely cutting back on the hours spent behind his desk.
“Even when I’m home, I have a beautiful desktop set up on my desk with a big screen, but I would say 95 percent of the time I’m sitting on my easychair with my iPad in my hand, even if I’ve got a bigger screen literally 15 feet away,” the 66-year-old tells Arabian Business during an exclusive interview in Dubai.
For any other top-tier technology executive, this would count as a startling admission. For Tucci though, who in his 13 years at the helm has turned a struggling storage hardware vendor into a $20bn per year innovation powerhouse, this shift away from the desktop is just one of the so-called ‘mega trends’ shaking up the high-tech industry.
And the others? Cloud computing, social networking, and that which EMC is perhaps most intimately involved in, big data.
“You’re talking about information that’s on a massive scale — that continues to expand on a massive scale — we’re talking petabytes. Many, many companies are expanding in petabyte chunks,” Tucci responds, when asked to define the notoriously nebulous latter concept, which itself has only entered tech parlance in the last three or four years.
But for Tucci, the question is not just how and where businesses can store the endless streams of data now produced by everyday operations, whether they be high street retailers or oil and gas giants, but how to leverage it for competitive advantage. The conundrum is given an additional layer of complexity when taking into account that not all data is created equal.
“For years, a company or government made most of its decisions based on structured data, that which fits in rows and columns, yet statistics show that there’s three times as much unstructured data in companies and that unstructured data is growing five times as fast,” Tucci explains.
Unlike structured data, which is generally numeric and can be processed using standard tools, unstructured data is irregular and runs the entire gamut of formats from text files, videos, audio and images.
Tucci says that EMC’s technology, known as Greenplum, is specifically designed to help businesses observe trends in this kind of data and make operational decisions on the fly.
As a means to understand the supposedly transformational impact big data can have, Tucci highlights the example of online retail giant Amazon. Perhaps one of the site’s best-known features is its recommendations, which allow Amazon to push products that may be relevant to a buyer based on trends observed in their previous purchases.
Through the power of big data, however, businesses can take the concept several steps further and apply it to high street stores. “What they can do in retail is combine a bricks and mortar with a cyber experience,” Tucci explains. “If you opt in, you’ll allow them via Wi-Fi through your cell phone to interact with you, [the store will] know where you are in an aisle where they can recommend specials to you based on your [shopping] habits, based on the day. They’ll give you a whole different experience.”
It is not just in retail that companies are harnessing the potential of big data, Tucci claims. He highlights healthcare and oil and gas as two other sectors where the technology has become a game-changer. In healthcare, where it is estimated that about 80 percent of data is unstructured, big data can be used to predict patients’ likelihood of developing certain lifestyle diseases based on their medical history, as well as determine the most appropriate and cost-effective treatments based on real-time analytics. In the US, where access to public healthcare and its associated costs are hugely contentious, the potential benefits are obvious.
“This will trim down the costs of healthcare, because as populations get bigger and people live longer, healthcare is going to do nothing but increase in cost,” Tucci adds.
Like big data, cloud computing is another high-tech neology that has repeatedly promised to redefine the industry over the past five years or so.
Broadly speaking, the concept turns IT into a commodity that is bought and paid for on a per-use basis, much like everyday utilities such as electricity and water. The argument is that the cloud eliminates capital expenditure by effectively outsourcing an organisation’s IT department to a third-party provider, giving customers the freedom to buy as little or as much as they need depending on their day-to-day requirements.
However, security concerns raised by such a model, due the implication that key data and resources will be held outside of company’s own four walls has given the rise to two distinct flavours of the cloud.
Proponents of the aforementioned model, known as public cloud, include internet giants Google and Amazon Web Services. Hardware juggernauts, including EMC and rival IBM, have tended to support what is known as a private cloud, which involves companies building and managing their own cloud computing environment. The latter is generally accepted as being more secure, but comes with a significant cost premium.
“I do think it takes some scale,” Tucci admits, when asked about the cost of building a private cloud eco-system. “I don’t think small and medium-sized businesses are going to put up a cloud, but I do think that bigger businesses have plenty of scale to do it. There’s a lot of security reasons and competitive advantage reasons to why they might want to keep it inside their own walls.” He cites government departments, for one, as unlikely to outsource key IT components, due to external threats such as cyber terrorism.
But Tucci is also a proponent for a third way. Hybrid cloud computing, which combines facets of both, allows companies to extend their data-processing capabilities seamlessly out of their private cloud and into a public one via a secure connection, before scaling back again. Tucci claims that the hybrid cloud is of specific interest to businesses that are characterised by seasonal demand, such as online retailers at Christmas or hotel chains during the summer.
“When you get those bursts, or those peaks, as they’re coming you can shove some of that workload into a public cloud, and then if you get a lull you can pull it back,” he explains.
EMC, which operates through a network of re-sellers across the Middle East, says that it is seeing encouraging take-up of technologies like big data and cloud computing in the region, although it is reticent to disclose details of specific customers.
Tucci says that the company, which in its last financial year saw revenues rise by 9 percent to $21.9bn, is increasingly turning to emerging markets such as the Middle East for growth, given the slowdown in North America, Europe and Japan as a result of federal spending cuts and various financial crises.
“It’s very sizeable [the Middle East], but just as importantly it’s got tremendous growth. You got the more mature markets of Japan, the US and Europe, obviously growing slower than markets like here and some in Latin America, some in Africa and Asia are growing much more rapidly. We carve them out a bit and give them special focus and funding to grow faster,” Tucci says.
In EMC’s most recent third financial quarter, revenue growth slowed to 5 percent, which the group partly attributed to the US government’s federal shutdown. Massachusetts-based EMC is deeply entrenched in the US public sector and subsequently suffered as result of the October deadlock in Congress, which lasted for more than two weeks.
Tucci bristles when asked for his thoughts on the shutdown. He says that such episodes have repercussions the world over, and as the largest economy the US should not allow political bickering to negatively impact its role in the global financial system.
“A stall by the US creates big ripples, so I’m very hopeful that we’ll do the right things and address our deficits, address our capex spending and raising the borrowing limit, and not have another crazy shutdown and risk of defaults,” he says. “When you do that you just send ripples through the world, and the world is still recovering from the tremendous meltdown during 2008-2009.”
When appointed CEO of EMC in 2001, former Wang Laboratories boss Tucci inherited a company still badly shaken by the effects of the dotcom bubble’s burst. That crash saw the technology —heavy NASDAQ Composite stock market index plunge in value on the back of a realisation that many of web-based companies that speculators had gambled on were unlikely to turn a profit.
Despite the massive valuations attached to the initial public offerings (IPOs) of social networking giants Facebook and Twitter over the past 18 months, Tucci does not see a repeat of the dotcom bust seen a decade ago. Facebook’s flotation valued the company at $108bn at its peak market capitalisation, while Twitter was valued at about $13bn, even though it has never turned a profit.
“I think we’re being a little more selective. Back in the bust of 2000-2001, we had a phenomenon in the late 1990s when anything with ‘dotcom’ or ‘networking’ in the name, with any inexperienced team leading them, was getting a massive multiple,” Tucci recalls. “But on the other side the valuations are high and probably near bubble range. It’s more than frothy, let’s put it that way.”
At 66, Tucci is one of the US’s longest-serving high-tech leaders. During his tenure he has taken EMC from a struggling vendor of enterprise storage hardware to an industry innovator capable of competing with larger rivals such as IBM, Hewlett-Packard and Oracle. After initially signalling his intention to stand down from his post at the end of last year, Tucci has agreed to remain at the helm of EMC until the close of February 2015, when a decision will be taken on his future. “The reason is not so much because the board asked me to do it, but because of the people and the leaders,” he explains.
Tucci says he not yet decided if he will retire at this time, although he has made up his mind on at least one thing. “We will see what happens,” he says. “But I’m not going to go to the beach or play golf though.”