Deeply Undervalued, Ready To Surge

The data also evidently showed the dominance of EMC in the Network-Attached Systems (NAS). EMC led the NAS market with a share of 29% in the first quarter. NetApp came in second place with a market share of 14%. IBM landed in third place with 11.4%, during Hewlett-Packard and Hitachi have market shares of 10.2% and 9.4%, respectively.

These advantages bode then for small businesses, given its relatively low cost to install, also as better server performance relative to other network infrastructures. The demand will most likely come from small businesses, as there is a growing need for business continuity and adoption of remote and virtual office environments. But, there are other large enterprises that use the NAS infrastructure for less critical applications and processes.

The NAS market in the nearly term

Innovations just as cloud computing will as well benefit the NAS market in the nearly term. Cloud computing will all the same expand the functionalities and increase the market opportunities in this space. The key merit for the Cloud NAS is its ability to retrieve information without limitations on the physical location of the data. As enterprises are looking at relatively low cost effective storage infrastructure, the adoption of Cloud NAS is something to watch henceforth.

In a separate report, innovation firm Gartner forecasted that computing hardware spending will grow 5.1% this year. This is slower than the expected growth rate of 7.6%. It as well cited slowing global economic growth, the European debt crisis and the impact Thailand's floods have taken a toll on the outlook for IT spending.

The information storage business is the bread

The information storage business is the bread and butter for EMC. It constitutes more than 40% of its earnings. Other businesses like desktop and server virtualization software are a future growth driver for the company. But, I believe that the information storage will drive the company's value in the short to medium time frame.

The market share of EMC in the global storage market will increase significantly over the then 5 years. The share in storage market has increased to 29% coming from a market share of 24% in 2011. It continues to acquire smaller names in the global storage space. The recent acquisitions of Syncplicity and XtremeIO strengthen its position in the cloud computing space and file information management. The XtremeIO acquisition is a bet on the future of flash memory.