EMC President Pat Gelsinger weighs in on Dell and H-P's fight to buy data-storage company 3PAR

For EMC President Pat Gelsinger, HP would be able to better monetize the acquisition of storage company 3PAR than Dell because of its current strong position in the high-end enterprise market.

“Clearly they [HP] have a position in the enterprise. They should be able to sell that [3PAR]. But there are always integration issues,” explains Gelsinger. “I think HP has a better position to monetise it because of their stronger position higher in the enterprise. So if you look to who will get more value out of the 3PAR acquisition, I think HP is in better position. But that makes all that important for Dell.”

Despite the strong Dell/EMC partnership, Dell largely don’t have a product at that level, adds Gelsinger.

“So they have to extend their sales capabilities higher in the enterprise to be effective with it. It certainly makes it A fun sport to watch the competition. With HP’s board to prove that they are still active and can move forward despite their CEO.”

And from an EMC perspective, Dell would actually be a much better suitor.

“I would prefer 3PAR not being on HP’s hands because I think they can actually compete with us. They have a salesforce that could sell it,” confides the EMC executive.

If HP ends up acquiring 3PAR, it will certainly hurt its partnership with Hitachi – which currently supplies HP with high-end storage products. On the other hand, with or without 3PAR, EMC is commited to the Dell relationship.

“I certainly prefer that they [Dell] didn’t add this [3PAR] to the complexity of the mix. But wether they do it or not we’re going to be great partners with Dell,” adds Gelsinger.

Maines Paper & Food Service, a New York supplier to the restaurant industry, says it installed a Digital Lumens lighting system at its Conklin headquarters in June. It anticipates saving 1.7 million kilowatt hours of electricity a year.

The public proof-point should be a boost for the Boston designer of LED fixtures that rely on wireless networking and management software to more efficiently use energy. Dozens of other customers are in commercial deployment, says CEO Tom Pincince, just not publicly announced.

Maines says it is using 484 Digital Lumens fixtures in a 460,000-square-foot warehouse. The company is taking advantage of New York State rebates and anticipates a payback on the investment of less than a year, said Patrick DeOrdio, vice president of operations.

Maines had been using 400 watt, high-pressure, high-intensity sodium fixtures. It says the energy reductions are coming from a reduced wattage draw per bulb and because fixtures can be automatically turned off when not needed.

Digital Lumens, which has raised more than $11 million of venture funding, is not the only company using networking and management technologies to reduce lighting energy consumption. Others include Redwood Systems and Adura Technologies.

According to some experts, the market has huge potential. Lighting presently accounts for about 17.5 percent of global electricity use and about 20 percent in the United States. Fixtures with LED bulbs should capture 46 percent of the $4.4 billion U.S. market for commercial, industrial and outdoor lighting by 2020, says Pike Research.

“On the contrary,” insists Tim Pettitt, Palm’s senior product manager of smartphones at a briefing today in San Francisco, Calif. “Palm is going to be the mobility play for HP!”

Expect to see more smartphones coming from HP/Palm as well new mobile devices such as tablets/slates, printers and netbooks, all powered by the company’s mobile operating system, WebOS.

“Our goal is really to expand the form factor. We built WebOS to go on any device. So we knew we’re going to move off smartphones eventually… So definitely you’ll keep seeing things new coming out from Palm.”

It’ll be interesting to see if HP/Palm is able to break in the smartphone market, today dominated by Apple’s iPhone, Google Android and RIM. But you can forget about Nokia. The Finnish company just doesn’t get mobile Internet.

But it is easy to wonder if hype is getting ahead of reality. Factories will take years to ratchet up the production of these low-profit autos. And the impracticality of EVs will likely delay purchases once the early adopters snap up their babies.

In short, modest growth at a modest pace will probably define this market. Any thing else is guesswork at this point. Here are several divergent predictions just from today that show how difficult it is anticipating this market place:

*China will have 50 million electric cars in operation in 2020. This total will rise to 200 million by 2030, according to Frbiz, a business-to-business Web site. Clearly this number is pie in the sky. Chinese officials have an government production target of 500,000 alternative fuel vehicles next year. So a 50 million target implies a ten fold manufacturing increase in a real hurry.

*Pike Research expects 3.1 million electric vehicles to be sold worldwide by 2015 – an obviously more realistic assessment. But this too suggests a sharp manufacturing increase. If worldwide production is roughly 50,000 vehicles this year, factories will need to increase 10 fold to reach the 620,000 annual level to meet this forecast.

*Pike also expects that from 2010 to 2015, 4.7 million charging stations will be installed across the globe. This requires roughly 1 million new stations a year.

*That pace implies Americans will have access to 1 million vehicle charging spots by 2015 – primarily at home. (The rest of the world will rely more heavily on public charging spots since home charging is less convenient.) To accomplish this gargantuan task, the world needs to move beyond pilot phase rapidly. But this doesn’t appear likely.

*For instance, Icon Parking Systems said today it will install EV charging stations at some of its 200 parking garages in Manhattan. All well and good. But the level II stations will operate in a test mode (managed by Car Charging Group and running on equipment from Coulomb Technologies) for an unspecified period providing monthly, weekly and daily charging. So just how long will the test will last before commercial deployment begins? And more than that, how that will electric charger swapping work in Manhattan?

*This same uncertainty accompanies Enterprise Rent-A-Car’s promise last week to offer about 500 Nissan Leafs at rental dealerships in Los Angeles, Seattle, Portland and San Diego. The announcement follows a similar agreement by Hertz to do the same – with expectations EVs could be available as early as January. But what will a customer do when the car runs out of juice after 100 miles (or less)? And do you bring back a car with an uncharged battery? There remains a lot to work out.

*Finally, Chelsea Sexton, the former GM employee best known for her defense of the EV-1 electric car in “Who Killed the Electric Car,” highlights the dilemma facing car manufacturers. She predicts 40,000 to 50,000 electric cars will be on the market for sale next year. Consumer demand will be 200,000, creating a shortage, Sexton said in an interview of the Forbes Web site. However, what she is referring to is demand from early adopters. What happens when this initial surge passes?

Clearly experts expect electric cars to create strong consumer interest. PG&E officials, for example, are planning for quick-than-expected pick up in northern California, where they seriously worry electrical transformers will not be able to handle the extra juice. A single electric car can draw as much power as a home on a hot summer day.

But given the sour economy, faster-than-expected might be less than some anticipate. This was certainly the gist of the observation from Chinese carmaker BYD, which released quarterly earnings on Sunday. Revenue from the company’s lithium-ion battery and other electronic businesses (cell phone components) rose 55 percent. But overall, the company warned of an auto market that slowed during the second quarter and which would only show modest growth in coming months.

The company, which is 10 percent owned by a unit of Warren Buffett’s Berkshire Hathaway, plans to begin selling its e6 electric car in the United States this year. One hopes BYD does not anticipate this EV is a ticket to new prosperity.

The new filing lays out a business plan that is scaled back in one measure and more aggressive in another. It also points out that sales have doubled so far this year – growth that could interest investors.

Daqo is a Chinese manufacturer of polysilicon used by solar companies Yingli Green Energy, Solarfun, Solargiga, China Sunergy and Tianwei New Energy to produce photovoltaic products. It boasts it is one of largest polysilicon companies in China.

Taqo has nonetheless scaled back its expansion plans. In its January filing with the SEC, it projected production capacity of 3.300 metric tones by September 2009.

Its updated filing on Aug. 18 says this same level of production capacity (3,300 metric tones) was in place as of June 2010. Plans now call for an expansion to 7,300 metric tonnes by the end of 2012, instead of the 9.300 metric tonnes projected in January.

At the same time, the company is more aggressively pursuing vertical integration. It plans to begin commercial wafer manufacturing in the first quarter of 2011. Module production already has begun with solar cells it buys from other makers. As of June, module production capacity was 50 megawatts. It will grow to 200 megawatts in the first quarter of 2011.

“We also intend to enter into the cell manufacturing business in the future,” the documents says – a new addition to the business plan.

In its January papers, the company’s goal was to expand into module manufacturing and solar power system integration and installation. It offered few details.

Business so far this year appears solid. The company’s revenue for the first six months of the year doubled to $98 million from $49 million for the same period in 2009. Profits rose more slowly, to $18 million from $14 million. For all of 2009, sales were $111 million and net income was $30 million.

Daqo said it would use the money from an IPO to expand its polysilicon and module businesses and to enter wafer manufacturing. It is not the only Chinese solar company to balk on an IPO this year. Both Trony Solar Holdings and JinkoSolar Holding have back away from selling shares to the public.

This was evident in a disappointing earnings report from wind turbine market leader Vestas Wind Systems. The Danish company on Wednesday responded to the downturn by cutting its annual sales forecast to 6 billion Euros from 7 billion and said it expects an EBIT margin (before interest and taxes) of about half of its previous estimate.

Its explanation was that turbine shipments to projects in Germany, Spain and the United States were delayed.

Here are several details from the financial report:

*Second-quarter shipments of 283 turbines were down 54 percent;
*Second-quarter revenue was off 17 percent;
*The company swung to an after-tax loss of 119 million Euros from a profit of 43 million Euros a year ago;
*The company laid off 300 people in Denmark. It still expects to add 3,000 employees in 2010, down from previous target of 3,400.

“The decline in revenue and earnings reflects the very low level of activity in the wake of the credit crisis and Vestas’ decision not to adjust its capacity further because of short-term market developments,” the company said in a press release.

Vestas tempered the news by pointing out that second-quarter orders rose to 3,031 megawatts of turbines, a record. Banks are more critical of projects than they were before the credit crisis began, but now more are venturing into the market, the company said.

And yet, there is no doubt this burgeoning industry is being held back by a lack of finance. The European Wind Energy Association acknowledged the same in early July as it reported that 118 offshore wind turbines were installed in Europe during the first half of 2010. “Developers are severely constrained.”

A more dire report came from the American Wind Energy Association late last month. The trade association said wind power installations so far this year were off 71 percent from 2009. Only 700 megawatts of equipment was added in the second quarter – below levels from 2007.

The trade association blamed the lack of national renewable portfolio standards mandating the use of renewable energy.

While the second half of the year could be better, installations for the full year will likely be 25 percent to 45 percent below last year, it said.

It could be some time before this boom and bust industry regains its once lofty status.

The department said Thursday that 31,600 homes across the country were weatherized in June, a record. The target for the summer: 80,000. It also said that for the first time, weatherization will include renewable energy – such as solar – along with energy-efficient appliances, cool roofs and tankless water heaters.

To fuel the effort, Energy Secretary Steven Chu on Thursday awarded $120 million of Recovery Act funds to more than 100 organizations to expand programs and undertake pilot projects.

With PACE, or Property Assessed Clean Energy, on the sidelines, alternate efforts to improve the energy efficiency of homes and buildings have been necessary. PACE came to a near halt this spring and summer when Fannie Mae, Freddie Mac and Fannie regulator, the Federal Housing Finance Agency, barred lenders from writing mortgages for PACE homes. (PACE programs, which were taking root in 23 states, typically lend government money to homeowners and place special assessments for repayment on property tax bills.) Fannie and company worried PACE liens would receive priority over mortgage leans in the even of defaults.

To mimic the work of many PACE programs, Chu said the government would now permit weatherization programs to install renewable energy – solar panels, solar heating systems and wind turbines – as well as cool roofs, insulation, high-efficiency appliances, tankless water heaters, combination boilers for heat and hot water, in-home energy monitors and ductless heat pumps. In other words, weatherization begins to look more like energy retrofit.

Retrofit projects in 27 states will get $90 million of the money. The work will be performed by 103 local companies. An additional $30 million will support 16 pilot projects targeting low-income households and testing new ways to finance retrofits and new technologies.

For instance, one program in Washington, D.C., received $2.6 million to improve energy efficiency at 2,500 eligible housing units. A $1.25 million loan loss reserve will be set up so nearly $8 million in private loans can be made to homeowners.

Another $850,000 will go to a program in Utah to create a revolving loan program offering low-interest financing to low-income households.

The Energy Department said its weatherization program created 13,000 jobs for carpenters, electricians and other workers during the second quarter.

A strategy that is paramount for SAP, if it wants to reach its ambitious goal of 1 billion users in 2015; 3 times the number of its current user base.

“60% of the world’s transactions touch SAP,” said SAP co-CEO Bill McDermott.

According to McDermott, the 38-years old German company is now:

1. The #1 software business applications company in the world;
2. The #1 in business intelligence software;
3. The #1 in business analytics software;
4. And now the #1 mobile leader in the business software industry after the Sybase acquisition.

In a follow-up interview, I’ve asked Bill McDermott what the Sybase acquisition means for SMBs:

The small companies want mobile even more than the big ones because they don’t have the infrastructure, the onsite systems. So either the computing powers coming on-premise, from on-demand or in the cloud, everyone wants to enable it on device. Especially the small and mid-size ones.

Small and mid companies are the suitespot for SAP and Sybase because the mobile is going to go even faster, is going to be even more important for companies that don’t have a lot of infrastructure and a lot of complexity/ They’re going to want to enable their mobile workers.

McDermott went also to great length to explain that SAP is not a “command and control” kind of company anymore and that its management team is very racially diverse pointing to Sybase CEO John Chen (Chinese) and SAP CTO Vishal Sikka of Indian origin.

“Look at this leadership team. Coming from all corners of the globe. All different skillsets. All different cultures. The know-how is amazing. It’s a very collaborative management team. Not a control and command style,” adds McDermott.

Not sure why he thought this was an important thing to point to. Perhaps there was a time when everybody at SAP were blond with blue eyes, fluent in German and wearing a tie!

Facebook VP of Product Chris Cox talks about the 3 places that matter:

1. Home
2. Work
3. The third place. The most important and critical place. The foundation for society and the community that we live in. It’s the bar, the restaurant, the library, the street outside… It’s the place we share with everybody

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