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Will Ireland’s Woes Reflect on the Storage Industry?

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emc-logoDespite protestations to the contrary, it seems that Ireland has finally accepted EU bailout money to the tune of some £77 billion.  This final humiliation sees the end of the economy dubbed “The Celtic Tiger” which was characterised by the establishment of many large IT organisations’ European offices in the country.  This includes Dell, EMC, Microsoft and Intel.  I’m sure there are more but they are the first that spring to mind.   What first attracted these large companies was the favourable tax regime and EU subsidies, with a corporation tax level of around 12.5% (compared to over 20% in the UK).  This low tax policy is now at risk as Ireland attempts to re-stabilise their economy and pay off the debts.  If that happens, what impact is that likely to have on IT, particularly storage, companies?

Dell saw the writing on the wall some time ago and moved out to Poland where operations were clearly deemed to be cheaper.  But what about EMC?  A large amount of their manufacturing takes place in Cork; of course a lot of it is simply assembly and testing and that could be moved any cheaper alternative.  EMC are moving further towards commodity hardware based on Intel technology, making the whole assembly and testing process easier and cheaper.  For instance, I wonder if the same level of testing takes place with VMAX and CLARiiON as does with Symmetrix arrays?  If not, could that assembly work be moved to another location where the complex and expensive testing facilities are no longer required?

Then there’s the question of stability.  Ireland looks to be heading for a general election, so politics as well as economics are unstable.  This could be another deciding factor on leaving for more favourable shores.

There is a lot of other investment by EMC in the Cork facility; they run helpdesk facilities from there; there’s a large customer briefing and testing centre, so perhaps the Cork investment is too much to give up.  However nothing is ever guaranteed.

I wonder if Storagezilla can speak Polish?

About Chris M Evans

Chris M Evans has worked in the technology industry since 1987, starting as a systems programmer on the IBM mainframe platform, while retaining an interest in storage. After working abroad, he co-founded an Internet-based music distribution company during the .com era, returning to consultancy in the new millennium. In 2009 Chris co-founded Langton Blue Ltd (www.langtonblue.com), a boutique consultancy firm focused on delivering business benefit through efficient technology deployments. Chris writes a popular blog at http://blog.architecting.it, attends many conferences and invitation-only events and can be found providing regular industry contributions through Twitter (@chrismevans) and other social media outlets.
  • http://storagezilla.typepad.com Storagezilla

    Since I work for EMEA and not Cork by right that’s only one of the languages I don’t speak but should.

    Even the EU knows that the corporation tax is a deal breaker for Ireland’s export based Economy and on Sunday we were told it is not on the table at any stage. We’d probably restore the Irish Punt and drop the Euro faster than we’d move on that point.

    As for Dell you’re mixing up two different situations. Dell had a program in place to reduce their number of manufacturing facilities worldwide. Poland saw an opportunity to take that facility from Ireland. ireland let it go and watched as Dell then sold the operation to the Chinese ad was their right and obviously their long term plan.

    Though it makes one wonder how competitive Poland could be at building mass market electronics Vs China?

    • http://www.brookend.com Chris Evans

      Mark

      Shipping & locality have something to do with it I guess. Shipping an entire DMX from China to (say) the UK would have been expensive especially based on the timescales customers expect. Shipping servers in bulk that could easily be modified would be much easier. Just out of interest, where do vBlocks get assembled?

      Chris

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