Sept. 25 (Bloomberg) -- Joe Tucci pulled EMC Corp. out of a two-year sales slump after the dot-com bust. Now he’s gearing up for round two: an industry shakeup that he expects to be even more punishing.

Tucci, 62, says the global economic crisis and a shift to a model where companies get computing power over the Internet will drown at least some of the biggest names in computing.

“When you have a sea change, it never goes back to the way it was,” Tucci said in an interview this week. “I would predict that if you look at the major players now, six years from now there is a change to that list. More than one will surf it well and more than one will not surf it well. My job is just very, very simple: Surf it well.”

To that end, Tucci says EMC, the world’s largest maker of storage computers, will hold on to its roughly 84 percent stake in VMWare Inc., the top maker of so-called virtualization software, which helps run data centers more efficiently. He plans to work more closely with Cisco Systems Inc. and said he will continue to make acquisitions.

“Either you’re going to be committed to a strategy or you’re not, and we’re committed to the strategy,” Tucci said. When asked if he plans to keep hold of VMware, he said: “The answer is yes.”

EMC, based in Hopkinton, Massachusetts, makes computers that companies use to store corporate information and back up files. It had 22 percent of the $20 billion market for dedicated storage computers in 2008, ahead of International Business Machines Corp. and Hewlett-Packard Co., according to IDC, a research firm in Framingham, Massachusetts.

Office Furniture

Last week, EMC hired Intel Corp. executive Patrick Gelsinger to oversee storage, security and content-management products, making him a candidate to be the next CEO. Tucci said he will stay on as chief through 2012. In the interview, he said he hasn’t decided whether he’ll retire at that time.

EMC fell 36 cents to $16.80 today in New York Stock Exchange composite trading. The shares have advanced 60 percent this year, compared with the 16 percent gain in the Standard & Poor’s 500 Index.

EMC, founded as an office furniture seller in 1979 before moving into technology, was the best U.S. performer on the NYSE in the 1990s, rising from a split-adjusted 7 cents at the beginning of 1990 to more than $50 in 1999.

Dot-Com Bust

Tucci joined the company in 2000 and took over as CEO a year later, just after the Internet bubble burst. EMC customers with names like EToys went out of business, while Hewlett- Packard, IBM and Hitachi Ltd. stepped up competition. EMC’s sales dropped 20 percent in 2001 and 23 percent in 2002.

Tucci shifted EMC’s focus to software and services, which carry wider margins than storage machines, and acquired companies including VMWare. About 58 percent of EMC’s $14.9 billion in revenue last year came from software or services.

The scope of the current slowdown is far greater than the dot-com bust, Tucci said. Even though the recession is easing, “there is nothing that I see or expect that will make this a V- shaped recovery,” he said.

Virtualization and cloud computing, two markets that EMC is focusing on, are designed to make corporate data centers more efficient by enabling computer servers to run multiple operating systems and process many tasks at once. That means computing resources can quickly be shifted to where they are needed most, such as during a surge in visitors to a company’s Web site after an advertising campaign.

Lottery Ticket

EMC bought VMware in 2004 for about $625 million and sold 10 percent in an initial public offering in 2007. The shares rose as high as $124.83 in October 2007 and closed yesterday at $38.52, giving the company a valuation of $15.3 billion.

If VMware’s shares rise as demand recovers, Tucci may face increasing shareholder pressure to spin off the unit, said Kaushik Roy, an analyst at Wedbush Morgan Securities Inc. in Los Angeles.

“He bought VMware and it turned out to be a lottery ticket,” Roy said. “It’s the biggest chance to reward shareholders over the next few years.”

Tucci said he feels no pressure from shareholders to sell or spin off VMware.

Tucci hasn’t slowed EMC’s pace of acquisitions during the slowdown, and he isn’t planning to go on a spending spree now that the economy is improving.

Consolidation in the technology industry may mean EMC becomes an acquisition target, said Aaron Rakers, an analyst at Stifel Nicolaus & Co. in St. Louis.

Tucci said it’s “absolutely crazy” to say that EMC can’t remain independent. Even so, if a company came along and “felt they could get more value” from EMC and were willing to pay for that, EMC would at least consider the offer, he said.

“That’s what the world’s all about and you’ve got to do what’s in the best interests of the shareholders,” Tucci said.

To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net

Last Updated: September 25, 2009 16:16 EDT