Outsourcing overhyped, overused, says EMC's Tucci

EMC's CEO says the company might look at further acquisitions but is now focused on companies that will help grow its existing businesses

"Outsourcing" is a word we hear more and more these days, but according to EMC chairman and CEO Joe Tucci, it's one that's used too much.

"I think 'outsourcing' is an overused word. I think what you are going to see more of is companies willing to outsource a business process. So for instance, in EMC we outsource all our payroll, but we outsource the entire process, not just the IT process. So I think you are going to see a lot more of that. I think you are not going to see wholesale take everything. I think that market is slowing down," he said.

Tucci was speaking during a news conference on the sidelines of his company's EMC Forum event.

He said outsourcing of specific functions, such as PC backup. which EMC offers through its Berkeley Data Systems unit, is where he sees success in outsourcing.

"I see business process outsourcing speeding up, I see a slowdown in wholesale 'take my whole datacenter, take my applications and you do it for me.' I think that market is not going to be a robust market," he said.

Last week the data-storage company reported a third quarter net income of $493 million, up more than $200 million over the same period last year. Revenue jumped to $3.3 billion from $2.8 billion. The company was helped during the quarter by the sale of a partial stake in virtualization software maker VMware to Cisco Systems. EMC acquired VMware in 2003.

Tucci said EMC might look at further acquisitions but is now focused on companies that will help grow its existing businesses.

"My philosophy is that I want to stay focused on what I call these eight spheres of technology, so acquisitions that we do would basically make some of these spheres stronger rather than put another sphere on the board," he said. The eight areas he referred to are: intelligent information management, enterprise content management, virtualization, resource management, storage, availability, security, and archiving.

"That being said, eventually we will add a new sphere, but that's not my immediate attention," Tucci said.

During the news conference Tucci also confirmed that Mark Lewis has become president of the company's Documentum unit. Lewis was previously chief development officer for EMC.