Editor: At the suggestion of Brackett Denniston, Senior Vice President and General Counsel of GE, who felt it is important to counter the current public cynicism about corporations, we are running this series of interviews of general counsel to provide a model for other general counsel to speak out themselves and to urge their CEOs to speak out publicly about the good things their companies do for the economy and for the community. Do you feel that this effort is needed?
Dacier: It's very worthwhile, particularly at this time when there is so much scrutiny and cynicism. Brackett is an outstanding individual and his suggestion is well taken and timely.
I feel good about the country and its prospects for recovery. When I look at our company, EMC, and think about what is going on in other companies around the nation, there is no reason for cynicism. In 1978, we had only one employee and we now have more than 40,000 employees and every person in this company worldwide works very hard every day.
Like many U.S. companies, EMC's employees continually take innovative ideas, put them it into products and changed the way the industry works. They have been well rewarded for their dedication, but that reward came at great risk because they were willing to invest their careers to turn great ideas into a reality.
Additionally, our employees are global and paid good salaries, which translates into purchasing power and in turn into prosperity not only here at our headquarters in Massachusetts, but in every location we have throughout the world.
Editor: Tell us about your career at EMC.
Dacier: I started my career at EMC in 1990. There was no legal department at EMC when I arrived. Through the 1990s, my department grew. I hired a few people and my duties and responsibilities expanded such that my practice as a lawyer became national and then international in scope. Today, I have 70 lawyers that work for me and a total of 115 in my legal group. I also lead a number of business groups, including EMC's real estate, facilities, internal audit, sustainability, and aviation organizations.
Editor: As a backdrop for our discussion, please provide us with information about EMC's current economic performance and its investment in R&D.
Dacier: EMC is the world's leading developer and provider of information infrastructure technology and solutions that enable organizations of all sizes to transform the way they compete and create value from their information. For 2008, EMC posted total consolidated revenue of a record $14.88 billion, an increase of 12% year over year representing EMC's sixth consecutive year of double-digit annual revenue growth.
Additionally, EMC continually invests in R&D and its state-of-the-art development labs worldwide to develop new and enhance its existing products to meet changing customer requirements. In 2008, our research and development expenses totaled $1,721.3 million.
Editor: I understand that EMC is one of 10 companies - and the only technology company - selected by Fortune as companies that are most admired in terms of their product and service quality.
Dacier: We were given that designation because we always put customer service first. We listen to and give our customers what they want and service them in a fashion that shows them that they are number one.
Overall, what we've done is to change the way products are developed, delivered and supported in the information technology industry. There are two parts to what we do.
One is to provide what we call information infrastructure, which gives our customers a foundation that enables them to manage and secure their vast and ever-increasing quantities of information. We help them automate their datacenter operations and, in conjunction with that, our products help reduce power and cooling costs. We, in essence, help our customers leverage the critical information for their businesses so that they are agile and have a competitive edge.
The second critical part of our business is what we call virtual infrastructure and through our own products and our majority stake in one of our subsidiaries called VMware, we are the leading provider of virtualization solutions from the desktop to the datacenter. We feel that our virtual infrastructure products can and do support a wide range of operating systems and application environments. It really has taken the world by storm.
So, with those two aspects of our business, you can see one important common thread which is that we have the critical products for all aspects of the datacenter and every corporation around the world today has not only an ever-increasing need for storing, using and maintaining its information, but also for managing their servers. EMC and its comprehensive portfolio of products address both of these needs.
Editor: I understand that your company contributes in a major way to our national security - one of this country's top priorities.
Dacier: Security is one of the hottest and most needed services associated with technology today. Protecting our nation's critical information infrastructure is a priority for both government and industry. This not only means protecting sensitive information and systems, but also enabling compliance with various regulations and policies.
A few years ago, we bought a company called RSA Security, which is now our security division. And, we have ever-increasing demands from our customers for security products to meet their needs. One of our products is EnVision, which puts government customers and corporations in a better position to detect incidents and breaches involving people trying to hack into their systems by allowing the IT user to detect this and take steps to ensure that their IT systems are safe.
Editor: What are some areas in the stimulus package where EMC is making a contribution?
Dacier: The stimulus package has and will continue to cast a national spotlight on issues that have already been on EMC's radar.For over a decade, EMC has been committed to developing energy efficient products, designing environmentally-friendly facilities and supporting energy efficiency standards for IT. Also, for many, many years, we have been helping our customers in the healthcare industry to develop and support electronic health record solutions that give a consolidated patient view and support safer and more efficient patient care.
Joe Tucci, our Chairman, President and CEO, has been involved in a number of national initiatives, including those relating to healthcare records, broadband and energy efficiency, and has been speaking out publicly about our company's contributions in these areas. We feel that the stimulus package should lead to further innovation and demand for IT technology products, which should benefit everyone in the IT industry including EMC.
Editor: I gather that your virtualization program will be a great energy saver.
Dacier: It is. Virtualization is leading to a dramatic reduction in power costs by users. It also leads to an exponential increase in the efficiency of the servers for which the virtualization products are deployed. Additionally, through our use of flash technology in existing information infrastructure products and in future generations of products, we will help customers dramatically reduce the dollars spent for heat, power and cooling and this leads to an immediate return on investment for our users. Sustainability is important to our customers and to EMC.
Editor: The prosperity and future of the U.S. is closely tied to that of the world. Describe EMC's global presence.
Dacier: As I previously mentioned,EMC is a worldwide IT technology company and a global leader in information infrastructure solutions. We have a number of Centers of Excellence (which are in essence R&D centers) in the world located in the United States, China, India, Ireland, Israel and Russia. These centers are staffed by engineers working on new products, new technologies and new solutions.
As I mentioned earlier, EMC spent $1,721.3 million on R&D in Massachusetts and throughout its Centers of Excellence in 2008. We are not only focused on the community where we have our headquarters, but are also focused on communities worldwide. That's also another reason why EMC was noted in Fortune as being the most admired technology company because we really are international in our scope, focus and reputation.
Editor: With respect to your employees, I understand that EMC is focused on maintaining their health rather than waiting until they get sick.
Dacier: We encourage our employees to participate in and take advantage of the various tools in our wellness program, which empowers and encourages them to think about their health and do what's right for their physical and personal well being. Our benefits group has done an outstanding job of looking for ways to soften the impact of the skyrocketing increases in medical and other health costs. As a result, we have a very healthy employee population.
Editor: I understand that EMC is deeply committed to education both through philanthropy and in terms of supporting educational institutions.
Dacier: Yes. We're committed to ensuring we sustain the society in which we live. This includes focusing on our environment, advancing access to education, increasing our community involvement and furthering diversity throughout our global workforce.
Advancing science, technology, engineering and mathematics education is a local, national and worldwide effort for EMC. Joe Tucci served for four years as chairman of the Business Round Table's task force on education and the workforce, which is focused on ensuring that high school graduates are successful in a global economy. In Massachusetts, Joe co-chaired the Governor's Readiness Project, which is a group of community and business leaders that developed a ten year strategic plan to improve pre-K through higher education in Massachusetts. Additionally, EMC donates and encourages the use of technology to augment classroom teaching, and sponsors a variety of teacher training and development programs and robotics teams.
We also have a number of initiatives to help educate the future workforce with universities around the world. EMC's Academic Alliance program provides an information management and storage technology curriculum, professor training and support to more than 170 colleges and universities in countries around the world including Australia, Brazil, China, Germany, India, Ireland, Mexico, Russia, Scotland, Thailand and the United States.
Editor: Tell us about the role of the legal department.
Dacier: The lawyers in my department worldwide are here to help the business achieve its goals and objectives. We are lawyers, but we are also business people and our goal is to help the company function within the framework of the law, both here at home and globally. Our lawyers are close to the business and the business people. They provide appropriate counsel and advice recognizing that there's a line that can't be crossed. Nevertheless, we get the transactions done without delay. As a result, our lawyers have a reputation with regulators, customers and competitors of being honest and ethical in all that we do.
Editor: In what ways do members of the legal team benefit the community and support important values?
Dacier: I encourage our lawyers to take some time to help those that are in need. We are fortunate to be working for such a large and successful company and know that there are those who are not as fortunate.
We believe that, either through local volunteer efforts at their religious or other community organizations or through legal organizations like bar associations, it is very important to be involved and also have positions of leadership. I set that example myself. Many years ago, I was president of the local Boy Scout council and now I serve on the council of the Boston Bar Association and am a trustee of the Social Law Library, which is the oldest law library here in the United States. I am also involved in a number of other organizations and help out informally with people who call looking for help.
A number of the lawyers in the department, for example, are involved in the United States with the American Corporate Counsel Association, the Intellectual Property Owners Association and a number of other groups. And our lawyers overseas are also active in their local communities and regional bar associations.
Editor: You did not mention your key role in support of the Business Litigation Session in Massachusetts.
Dacier: That Session has been in effect now since 2000. It's been an outstanding success here in Massachusetts, and thousands of cases have been filed there and disposed of in a rapid fashion. In my opinion, the entire court system here in Massachusetts has benefited. Cases in the other court sessions have moved more quickly because complex and more time consuming business cases have been transferred to the Business Litigation Session.
Editor: Finally, what are your thoughts about what should be done to promote economic recovery?
Dacier: Everybody needs to check politics at the door and start working together. The current partisanship going on at all levels of government will stifle innovation and impede recovery.
There are many people globally that are ready, willing and able to put in a hard day's work. The ability of people to think, innovate and make things happen here in the United States is excellent, for example, so we should focus on harnessing their talents through education and economic incentives, including better tax rates. In the U.S., responsive government is needed at the federal, state and local level.
Above all, we must be wary of overarching regulation because it can restrain the ability of the private sector to contribute fully to an economic recovery. If we over regulate because of what some unethical people have done, we will harm the competitive spirit and the ability of this country to innovate and to play a leadership role both here at home and globally.