10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

  For the quarterly period ended March 31, 2008

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

  For transition period from              to             

Commission File Number 1-9853

EMC CORPORATION

(Exact name of registrant as specified in its charter)

Massachusetts	04-2680009
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
176 South Street Hopkinton, Massachusetts	01748
(Address of principal executive offices)	(Zip Code)

(508) 435-1000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  x                                                                                    Accelerated filer  ¨

Non-accelerated filer   ¨ (Do not check if a smaller reporting company)                Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of shares of common stock, par value $.01 per share, of the registrant outstanding as of March 31, 2008 was 2,067,236,697.

EMC CORPORATION

	Page No.
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets at March 31, 2008 and December 31, 2007	3
Consolidated Income Statements for the Three Months Ended March 31, 2008 and 2007	4
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2008 and 2007	5
Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2008 and 2007	6
Notes to Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3. Quantitative and Qualitative Disclosures About Market Risk	28
Item 4. Controls and Procedures	28
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	29
Item 1A. Risk Factors	29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3. Defaults Upon Senior Securities	37
Item 4. Submission of Matters to a Vote of Security Holders	37
Item 5. Other Information	37
Item 6. Exhibits	37
SIGNATURES	38
EXHIBIT INDEX	39

FACTORS THAT MAY AFFECT FUTURE RESULTS

This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of the Federal securities laws, about our business and prospects. The forward-looking statements do not include the potential impact of any mergers, acquisitions, divestitures, securities offerings or business combinations that may be announced or closed after the date hereof. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “plans,” “intends,” “expects,” “goals” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these words. Our future results may differ materially from our past results and from those projected in the forward-looking statements due to various uncertainties and risks, including those described in Item 1A of Part II (Risk Factors). The forward-looking statements speak only as of the date of this Quarterly Report and undue reliance should not be placed on these statements. We disclaim any obligation to update any forward-looking statements contained herein after the date of this Quarterly Report.

PART I

FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

EMC CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

(unaudited)

	March 31, 2008			December 31, 2007
ASSETS
Current assets:
Cash and cash equivalents	$	4,978,446		$	4,482,211
Short-term investments		635,056			1,644,703
Accounts and notes receivable, less allowance for doubtful accounts of $33,372 and $34,389		1,897,712			2,307,512
Inventories		953,085			877,243
Deferred income taxes		515,122			475,544
Other current assets		330,673			265,889
Total current assets		9,310,094			10,053,102
Long-term investments		2,246,942			1,825,572
Property, plant and equipment, net		2,141,922			2,159,396
Intangible assets, net		939,204			940,077
Other assets, net		803,190			775,001
Goodwill		6,774,690			6,531,506
Total assets	$	22,216,042		$	22,284,654
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	881,481		$	840,886
Accrued expenses		1,540,050			1,696,309
Income taxes payable		82,110			146,104
Deferred revenue		1,818,956			1,724,909
Total current liabilities		4,322,597			4,408,208
Income taxes payable		259,117			246,951
Deferred revenue		1,153,674			1,053,394
Deferred income taxes		286,843			288,175
Long-term convertible debt		3,450,000			3,450,000
Other liabilities		159,446			127,621
Total liabilities		9,631,677			9,574,349
Minority interest in VMware		209,959			188,988
Commitments and contingencies
Stockholders’ equity:
Series preferred stock, par value $0.01; authorized 25,000 shares; none outstanding		—			—
Common stock, par value $0.01; authorized 6,000,000 shares; issued and outstanding 2,067,237 and 2,102,187 shares		20,672			21,022
Additional paid-in capital		2,617,571			3,038,455
Retained earnings		9,739,127			9,470,289
Accumulated other comprehensive loss, net		(2,964	)		(8,449	)
Total stockholders’ equity		12,374,406			12,521,317
Total liabilities and stockholders’ equity	$	22,216,042		$	22,284,654

The accompanying notes are an integral part of the consolidated financial statements.

3

EMC CORPORATION

CONSOLIDATED INCOME STATEMENTS

(in thousands, except per share amounts)

(unaudited)

	For the Three Months Ended
	March 31, 2008			March 31, 2007
Revenues:
Product sales	$	2,340,430		$	2,112,426
Services		1,129,629			862,579
		3,470,059			2,975,005
Costs and expenses:
Cost of product sales		1,074,583			1,038,478
Cost of services		486,081			366,587
Research and development		433,514			355,392
Selling, general and administrative		1,082,215			875,690
In-process research and development		79,204			—
Restructuring credits		(357	)		(2,670	)
Operating income		314,819			341,528
Investment income		77,140			52,139
Interest expense		(18,042	)		(18,293	)
Other (expense) income, net		(4,763	)		4,840
Income before taxes and minority interest in VMware		369,154			380,214
Income tax provision		94,155			67,607
Income before minority interest in VMware		274,999			312,607
Minority interest in VMware, net of taxes		(6,161	)		—
Net income	$	268,838		$	312,607
Net income per weighted average share, basic	$	0.13		$	0.15
Net income per weighted average share, diluted	$	0.13		$	0.15
Weighted average shares, basic		2,075,152			2,080,039
Weighted average shares, diluted		2,110,805			2,121,826

The accompanying notes are an integral part of the consolidated financial statements.

4

EMC CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	For the Three Months Ended
	March 31, 2008			March 31, 2007
Cash flows from operating activities:
Cash received from customers	$	4,066,805		$	3,298,580
Cash paid to suppliers and employees		(3,056,784	)		(2,471,509	)
Dividends and interest received		77,958			57,824
Interest paid		(2,865	)		(3,201	)
Income taxes paid		(166,822	)		(73,011	)
Net cash provided by operating activities		918,292			808,683
Cash flows from investing activities:
Additions to property, plant and equipment		(146,512	)		(170,526	)
Capitalized software development costs		(54,321	)		(51,920	)
Purchases of short and long-term available for sale securities		(608,819	)		(1,891,806	)
Sales and maturities of short and long-term available for sale securities		1,196,985			2,192,202
Acquisitions, net of cash acquired		(337,809	)		(3,261	)
Other		(3,030	)		(860	)
Net cash provided by investing activities		46,494			73,829
Cash flows from financing activities:
Issuance of EMC’s common stock from the exercise of stock options		27,397			103,312
Issuance of VMware’s common stock from the exercise of stock options		23,669			—
Repurchase of EMC’s common stock		(557,244	)		(488,662	)
Excess tax benefits from stock-based compensation		28,511			12,812
Payment of short and long-term obligations		(3,782	)		(620	)
Proceeds from short and long-term obligations		1,114			2,229
Net cash used in financing activities		(480,335	)		(370,929	)
Effect of exchange rate changes on cash and cash equivalents		11,784			7,685
Net increase in cash and cash equivalents		496,235			519,268
Cash and cash equivalents at beginning of period		4,482,211			1,828,106
Cash and cash equivalents at end of period	$	4,978,446		$	2,347,374
Reconciliation of net income to net cash provided by operating activities:
Net income	$	268,838		$	312,607
Adjustments to reconcile net income to net cash provided by operating activities:
Minority interest in VMware		6,161			—
Depreciation and amortization		254,619			212,848
Non-cash restructuring and in-process research and development		80,970			—
Stock-based compensation expense		119,087			83,347
Increase (decrease) in provision for doubtful accounts		3,975			(787	)
Deferred income taxes, net		(26,656	)		(457	)
Excess tax benefits from stock-based compensation		(28,511	)		(12,812	)
Other		(4,887	)		1,980
Changes in assets and liabilities, net of acquisitions:
Accounts and notes receivable		416,788			142,873
Inventories		(28,174	)		18,302
Other assets		(78,881	)		(11,068	)
Accounts payable		27,501			45,685
Accrued expenses		(253,761	)		(150,962	)
Income taxes payable		(46,545	)		(4,952	)
Deferred revenue		175,983			181,489
Other liabilities		31,785			(9,410	)
Net cash provided by operating activities	$	918,292		$	808,683

The accompanying notes are an integral part of the consolidated financial statements.

5

EMC CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)

	For the Three Months Ended
	March 31, 2008			March 31, 2007
Net income	$	268,838		$	312,607
Other comprehensive income, net of taxes (benefit):
Foreign currency translation adjustments		11,487			7,249
Changes in market value of investments, including unrealized gains and losses and reclassification adjustment to net income, net of taxes (benefit) of $1,061 and $(2,469)		(5,238	)		2,560
Changes in market value of derivatives, net of tax benefits of $(19) and $(7)		(764	)		(71	)
Other comprehensive income, net of taxes (benefit)		5,485			9,738
Comprehensive income	$	274,323		$	322,345

The accompanying notes are an integral part of the consolidated financial statements.

6

EMC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  Basis of Presentation

Company

EMC Corporation (“EMC”) develops, delivers and supports the Information Technology (“IT”) industry’s broadest range of information infrastructure technologies and solutions.

EMC’s Information Infrastructure business supports customers’ information lifecycle management (“ILM”) strategies and helps them build information infrastructures that store, protect, optimize and leverage their vast and growing quantities of information. EMC’s Information Infrastructure business consists of three segments – Information Storage, Content Management and Archiving, and RSA Information Security.

EMC’s VMware Virtual Infrastructure business, which is represented by a majority-owned equity stake in VMware, Inc. (“VMware”), is the leading provider of virtualization solutions that separate the operating system and application software from the underlying hardware to achieve significant improvements in efficiency, availability, flexibility and manageability.

General

The accompanying interim consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. These consolidated financial statements include the accounts of EMC, its wholly owned subsidiaries and VMware, a company majority-owned by EMC. All intercompany transactions have been eliminated.

Certain information and footnote disclosures normally included in our annual consolidated financial statements have been condensed or omitted. Accordingly, these interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2007 which are contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 29, 2008.

The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for any future period or the entire fiscal year. The interim consolidated financial statements, in the opinion of management, reflect all adjustments necessary to fairly state the results as of and for the three month periods ended March 31, 2008 and 2007.

Net Income Per Share

Basic net income per weighted average share has been computed using the weighted average number of shares of common stock outstanding during the period. Diluted net income per weighted average share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period. Common equivalent shares consist of stock options, unvested restricted stock, our $1.725 billion 1.75% convertible senior notes due 2011 (the “2011 Notes”), our $1.725 billion 1.75% convertible senior notes due 2013 (the “2013 Notes” and, together with the 2011 Notes, the “Notes”), and associated warrants (the “Sold Warrants”). Additionally, for purposes of calculating diluted net income per weighted average share, net income is adjusted for the difference between VMware’s reported diluted and basic net income per weighted average share, if any, multiplied by the number of shares of VMware held by EMC.

New Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (“FASB”) issued FAS No. 141 (revised 2007), “Business Combinations” (“FAS No. 141R”). This statement establishes principles and requirements for how the acquirer in a business combination (i) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree, (ii) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase, and (iii) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. FAS No. 141R is effective for fiscal years beginning after December 15, 2008. We are currently evaluating the potential impact of FAS No. 141R on our financial position and results of operations.

7

EMC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

In December 2007, the FASB issued FAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of Accounting Research Board (“ARB”) No. 51” (“FAS No. 160”). The objective of this statement is to improve the relevance, comparability and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards for the noncontrolling interest in a subsidiary and therefore deconsolidation of a subsidiary. FAS No. 160 is effective for fiscal years beginning after December 15, 2008. We are currently evaluating the potential impact of FAS No. 160 on our financial position and results of operations.

In March 2008, the FASB issued FAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“FAS No. 161”). This statement changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under FAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. FAS No. 161 is effective for fiscal years beginning after November 15, 2008. We do not expect FAS No. 161 to have a material impact on our financial position or results of operations.

2.  Acquisitions

In March 2008, we acquired all of the outstanding capital stock of Pi Corporation (“Pi”), a developer of software and online services to enable individuals to control how they find, access, share and protect their increasing volumes of digital information. This acquisition is a key element of our newly formed Cloud Infrastructure and Services Division, which is reported within our Information Storage segment. At the time of the acquisition, Pi was considered a development stage enterprise that resulted in the recognition of this purchase as an acquisition of assets rather than a business combination.

In March 2008, we acquired all of the outstanding capital stock of Document Sciences Corporation, a leading provider of document output management software that facilitates highly personalized, multi-channel communications to customers, partners and suppliers. The acquisition complements and extends our Content Management and Archiving segment’s position in the transactional content management marketplace.

In March 2008, we acquired all of the outstanding capital stock of Infra Corporation Pty Limited (“Infra”), a market-leading provider of IT service management software. Infra is reported within our Information Storage segment.

In January 2008, VMware acquired two businesses. One, a provider of virtualization technologies and services will allow VMware to leverage the acquired application and desktop virtualization services expertise to help VMware partners expand their virtualization services businesses. The other, a developer of application virtualization solutions will allow VMware to expand its growing virtualization capabilities.

The aggregate purchase price, net of cash acquired for these acquisitions, was $367.8 million and includes $30.0 million payable in 2010 associated with one of the acquisitions. Four of these acquisitions were accounted for as business combinations and Pi was accounted for as an asset acquisition. Based on our preliminary purchase price allocations, acquired amortizing intangibles totaling $62.1 million have been recorded with estimated useful lives of between one and ten years. The four business combinations resulted in total goodwill of $235.2 million. In addition, $79.2 million was allocated to in-process research and development (“IPR&D”). Two IPR&D projects related to the acquisition of Pi and one IPR&D project related to the acquisition of Infra were identified and written off at the time of the respective date of each acquisition because they had no alternative uses and had not reached technological feasibility. The value assigned to the IPR&D was determined utilizing the income approach by determining cash flow projections relating to the identified IPR&D projects. The stage of completion of each in-process project was estimated to determine the discount rates to be applied to the valuation of the in-process technology. Based upon the level of completion and the risk associated with the in-process technology, we applied a discount rate of 50% for the Pi IPR&D projects and 20% for the Infra IPR&D project. The purchase price allocations are preliminary and a final determination of required purchase accounting adjustments will be made upon the finalization of our integration activities.

8

EMC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The results of the acquired companies have been included in our consolidated results of operations from their respective closing dates. The following pro forma information gives effect to the four business combinations that were completed in the three months ended March 31, 2008 as if the acquisitions occurred at the beginning of the periods presented. The pro forma results are not necessarily indicative of what actually would have occurred had the acquisitions been in effect for the periods presented (table in thousands, except per share data):

	Three Months Ended March 31,
	2008		2007
Revenue	$	3,484,867	$	2,989,813
Net income	$	263,796	$	295,042
Net income per weighted average share, basic	$	0.13	$	0.14
Net income per weighted average share, diluted	$	0.12	$	0.14

3.  Investments and Fair Value

Effective January 1, 2008, we adopted FAS No. 157, “Fair Value Measurements” (“FAS No. 157”). In February 2008, the FASB issued FASB Staff Position No. FAS 157-2, “Effective Date of FASB Statement No. 157”, which provides a one-year deferral of the effective date of FAS No. 157 for non-financial assets and non-financial liabilities, except those that are recognized or disclosed in the financial statements at fair value at least annually. Therefore, we adopted the provisions of FAS No. 157 with respect to only financial assets and liabilities. FAS No. 157 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under FAS No. 157 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under FAS No. 157 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

• Level 1 – Quoted prices in active markets for identical assets or liabilities.

• Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Our investments are comprised primarily of debt securities that are classified as available for sale and recorded at their fair market values. In general, investments with remaining effective maturities of twelve months or less from the balance sheet date are classified as short-term investments. Investments with remaining effective maturities of more than twelve months from the balance sheet date are classified as long-term investments. At December 31, 2007, our available for sale, short and long-term investments were recognized at fair value which was determined based upon quoted market prices.

Unrealized gains and temporary losses on investments classified as available for sale are included within accumulated other comprehensive income, net of any related tax effect. Upon realization, those amounts are reclassified from accumulated other comprehensive income to investment income. Realized gains and losses and other than temporary impairments are reflected in the income statement in investment income.

At December 31, 2007, we held $972.5 million of auction rate securities and classified these as short-term investments. We have liquidated a portion of these securities through March 31, 2008, reducing our holdings in auction rate securities to $273.9 million or 3.5% of our total cash, cash equivalents and investments of $7,860.4 million at March 31, 2008. As a result of the volatility in the credit markets, the occurrence of failures of auctions for our auction rate securities and the related impact on the liquidity of these securities, we classified our auction rate securities as long-term investments at March 31, 2008, and we recognized a $14.6 million temporary decline in their value that is included within other comprehensive income. Our investment in auction rate securities is primarily composed of student loans that are supported by the federal government as part of the Federal Family Education Loan Program (FFELP) through the U.S. Department of Education, or to a lesser extent are obligations of municipalities rated single-A or higher. We believe the quality of the collateral underlying these securities will enable us to recover our principal balance.

9

EMC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following tables summarize the composition of our investments at March 31, 2008 and December 31, 2007 (tables in thousands).

	March 31, 2008
	Amortized Cost Basis		Aggregate Fair Value
U.S. government and agency obligations	$	660,397	$	679,125
U.S. corporate debt securities		187,380		189,206
Asset and mortgage-backed securities		246,632		240,750
Municipal obligations		1,426,893		1,438,846
Auction rate securities		288,500		273,902
Foreign debt securities		58,570		60,169
Total	$	2,868,372	$	2,881,998

	December 31, 2007
	Amortized Cost Basis		Aggregate Fair Value
U.S. government and agency obligations	$	578,547	$	589,558
U.S. corporate debt securities		188,512		189,772
Asset and mortgage-backed securities		276,661		277,050
Municipal obligations		1,387,711		1,392,252
Auction rate securities		972,514		972,525
Foreign debt securities		48,523		49,118
Total	$	3,452,468	$	3,470,275

Gross unrealized gains on all of our investments were $39.2 million and $22.0 million at March 31, 2008 and December 31, 2007, respectively. Gross unrealized losses on these investments were $25.6 million and $4.2 million at March 31, 2008 and December 31, 2007, respectively.

In accordance with FAS No. 157, the following table represents our fair value hierarchy for our financial assets and liabilities measured at fair value as of March 31, 2008 (in thousands):

	Level 1		Level 2			Level 3		Total
Money market funds	$	3,412,902	$	—		$	—	$	3,412,902
U.S. government and agency obligations		325,295		353,830			—		679,125
U.S. corporate debt securities		—		189,206			—		189,206
Asset and mortgage-backed securities		—		240,750			—		240,750
Municipal obligations		—		1,438,846			—		1,438,846
Commercial paper		—		10,745			—		10,745
Auction rate securities		—		—			273,902		273,902
Foreign debt securities		—		60,169			—		60,169
Strategic investments in publicly traded companies		497		—			—		497
Foreign exchange derivatives		—		40,000			—		40,000
Foreign exchange liabilities		—		(35,000	)		—		(35,000	)
Total	$	3,738,694	$	2,298,546		$	273,902	$	6,311,142

10

EMC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

To determine the estimated fair value of our investment in auction rate securities, we used a discounted cash flow model. The assumptions used in preparing the discounted cash flow model include an incremental discount rate for the lack of liquidity in the market (“liquidity discount margin”) for an estimated period of time. The discount rate we selected was based on AA-rated banks as the majority of our portfolio is invested in student loans where EMC acts as a financier to these lenders. The liquidity discount margin represents an estimate of the additional return an investor would require for the lack of liquidity of these securities over an estimated two-year holding period. The following table provides a summary of changes in fair value of our level 3 financial assets for the three months ended March 31, 2008 (in thousands):

	Auction rate securities
Balance at December 31, 2007	$	—
Transfers in from level 1		288,500
Unrealized loss included in other comprehensive income		(14,598	)
Balance at March 31, 2008	$	273,902

Unrealized losses on investments at March 31, 2008 by investment category and length of time the investment has been in a continuous unrealized loss position are as follows (table in thousands):

	Less Than 12 Months					12 Months or Greater					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
U.S. government and agency obligations	$	47,039	$	(92	)	$	495	$	(8	)	$	47,534	$	(100	)
U.S. corporate debt securities		45,666		(1,031	)		2,153		(106	)		47,819		(1,137	)
Asset and mortgage-backed securities		93,286		(7,021	)		3,266		(345	)		96,552		(7,366	)
Municipal obligations		200,813		(1,316	)		76,734		(1,084	)		277,547		(2,400	)
Auction rate securities		273,902		(14,598	)		—		—			273,902		(14,598	)
Total	$	660,706	$	(24,058	)	$	82,648	$	(1,543	)	$	743,354	$	(25,601	)

We evaluate investments with unrealized losses to determine if the losses are other than temporary. We have determined that the gross unrealized losses at March 31, 2008 are temporary. In making this determination, we considered the financial condition and near-term prospects of the issuers, the magnitude of the losses compared to the investments’ cost, the length of time the investments have been in an unrealized loss position and our ability and intent to hold the investment to maturity.

4.  Inventories

Inventories consist of (table in thousands):

	March 31, 2008		December 31, 2007
Purchased parts	$	78,901	$	70,981
Work-in-process		505,529		484,929
Finished goods		368,655		321,333
	$	953,085	$	877,243

11

EMC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

5.  Property, Plant and Equipment

Property, plant and equipment consist of (table in thousands):

	March 31, 2008			December 31, 2007
Furniture and fixtures	$	220,650		$	217,503
Equipment		3,202,263			3,198,878
Buildings and improvements		1,234,147			1,182,648
Land		115,265			115,539
Building construction in progress		86,850			92,183
		4,859,175			4,806,751
Accumulated depreciation and amortization		(2,717,253	)		(2,647,355	)
	$	2,141,922		$	2,159,396

Building construction in progress at March 31, 2008 includes $62.5 million for a facility not yet placed in service that we are holding for future use.

6.  Accrued Expenses

Accrued expenses consist of (table in thousands):

	March 31, 2008		December 31, 2007
Salaries and benefits	$	548,298	$	672,715
Product warranties		267,296		263,561
Restructuring (See Note 9)		87,699		125,924
Other		636,757		634,109
	$	1,540,050	$	1,696,309

Product Warranties

Systems sales include a standard product warranty. At the time of the sale, we accrue for the systems’ warranty costs. The initial systems’ warranty accrual is based upon our historical experience, expected future costs and specific identification of the systems’ requirements. Upon expiration of the initial warranty, we may sell additional maintenance contracts to our customers. Revenue from these additional maintenance contracts is deferred and recognized ratably over the service period. The following represents the activity in our warranty accrual for our standard product warranty (table in thousands):

	For the Three Months Ended
	March 31, 2008			March 31, 2007
Balance, beginning of the period	$	263,561		$	242,744
Current period provision		40,582			37,104
Amounts charged to the accrual		(36,847	)		(31,367	)
Balance, end of the period	$	267,296		$	248,481

The provision includes amounts accrued for systems at the time of shipment, adjustments for changes in estimated costs for warranties on systems shipped in the period and changes in estimated costs for warranties on systems shipped in prior periods. It is not practicable to determine the amounts applicable to each of the components.

12

EMC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

7.  Net Income Per Share

The reconciliation from basic to diluted earnings per share for both the numerators and denominators is as follows (table in thousands):

	For the Three Months Ended
	March 31, 2008			March 31, 2007
Numerator:
Net income, as reported, basic	$	268,838		$	312,607
Incremental dilution from VMware		(1,633	)		—
Net income, diluted	$	267,205		$	312,607
Denominator:
Basic weighted average common shares outstanding		2,075,152			2,080,039
Weighted average common stock equivalents		35,653			41,787
Diluted weighted average shares outstanding		2,110,805			2,121,826

Options to acquire 100.7 million and 165.0 million shares of our common stock for the three months ended March 31, 2008 and 2007, respectively, were excluded from the calculation of diluted earnings per share because of their antidilutive effect. For the three months ended March 31, 2008 and 2007, there were no shares potentially issuable under our Notes and the Sold Warrants because these instruments were not “in-the-money.” As a result, the Notes and the Sold Warrants were excluded from the calculation of diluted net income per weighted average share for the three months ended March 31, 2008 and 2007. The incremental dilution from VMware represents the impact of VMware’s dilutive securities on EMC’s consolidated diluted net income per share and is calculated by multiplying the difference between VMware’s basic and diluted earnings per share by the number of VMware shares owned by EMC.

8.  Stockholders’ Equity

Repurchases of Common Stock

We utilize authorized and unissued shares (including repurchased shares) to satisfy all shares issued under our equity plans. In April 2006, our Board of Directors authorized the repurchase of 250.0 million shares of our common stock. For the three months ended March 31, 2008, we spent $557.2 million to repurchase 35.9 million shares of our common stock. Of the 250.0 million shares authorized for repurchase in 2006, we have repurchased 235.1 million shares at a cost of $3.2 billion, leaving a remaining balance of 14.9 million shares. In April 2008, our Board of Directors authorized the repurchase of an additional 250.0 million shares of our common stock, increasing the number of shares available for repurchase to 264.9 million shares.

9.  Restructuring Credits

During the three months ended March 31, 2008 and 2007, we recognized restructuring credits of $0.4 million and $2.7 million, respectively.

The restructuring credit for the three months ended March 31, 2008 was primarily attributable to lower than expected severance payments on our 2006 restructuring programs partially offset by higher than expected severance payments on our 2007 and prior restructuring programs.

The restructuring credit for the three months ended March 31, 2007 was primarily attributable to lower than expected costs associated with vacating leased facilities in our prior restructuring programs.

13

EMC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The activity for the 2007 restructuring program for the three months ended March 31, 2008 is presented below (table in thousands):

2007 Restructuring Program

Three Months Ended March 31, 2008

Category	Balance as of December 31, 2007		Adjustment to the Provision		Utilization			Balance as of March 31, 2008
Workforce reductions	$	12,415	$	5,258	$	(6,504	)	$	11,169
Total	$	12,415	$	5,258	$	(6,504	)	$	11,169

The 2007 restructuring program commenced in the fourth quarter of 2007 and included approximately 450 employees. These actions impacted the Information Storage, Content Management and Archiving and RSA Information Security segments. The adjustment to the provision in 2008 was primarily attributable to finalizing severance payments. Approximately 400 employees included in this plan have been terminated and the remaining cash portion owed is $11.2 million which is expected to be substantially paid out through December 31, 2008.

2006 Restructuring Programs

The activity for the 2006 restructuring programs for the three months ended March 31, 2008 and 2007 is presented below (table in thousands):

Three Months Ended March 31, 2008

Category	Balance as of December 31, 2007		Adjustment to the Provision			Utilization			Balance as of March 31, 2008
Workforce reductions	$	83,155	$	(5,732	)	$	(27,706	)	$	49,717
Consolidation of excess facilities		2,563		(35	)		—			2,528
Total	$	85,718	$	(5,767	)	$	(27,706	)	$	52,245

Three Months Ended March 31, 2007

Category	Balance as of December 31, 2006		Adjustment to the Provision		Utilization			Balance as of March 31, 2007
Workforce reductions	$	127,820	$	—	$	(20,337	)	$	107,483
Consolidation of excess facilities		5,536		350		(499	)		5,387
Contractual and other obligations		4,814		—		(4,289	)		525
Total	$	138,170	$	350	$	(25,125	)	$	113,395

The adjustment to the provision in 2008 results from finalizing severance payments. Substantially all employees included in these programs have been terminated. The remaining cash balance associated with workforce reductions is $43.2 million and is expected to be substantially paid out through 2008. The remaining balance owed for the consolidation of excess facilities is expected to be paid out through 2018.

14

EMC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Prior Restructuring Programs

We implemented restructuring programs from 1998 through 2005. The activity for these programs for the three months ended March 31, 2008 and 2007, respectively, is presented below (tables in thousands):

Three Months Ended March 31, 2008

Category	Balance as of December 31, 2007		Adjustment to the Provision		Utilization			Balance as of March 31, 2008
Workforce reductions	$	1,251	$	77	$	(467	)	$	861
Consolidation of excess facilities		25,710		—		(3,186	)		22,524
Other contractual obligations		830		75		(5	)		900
Total	$	27,791	$	152	$	(3,658	)	$	24,285

Three Months Ended March 31, 2007

Category	Balance as of December 31, 2006		Adjustment to the Provision			Utilization			Balance as of March 31, 2007
Workforce reductions	$	19,219	$	—		$	(9,362	)	$	9,857
Consolidation of excess facilities		40,233		(3,020	)		(2,564	)		34,649
Other contractual obligations		1,916		—			6			1,922
Total	$	61,368	$	(3,020	)	$	(11,920	)	$	46,428

All employees included in these programs have been terminated. The remaining balance owed for the consolidation of excess facilities is expected to be paid out through 2015.

10.  Commitments and Contingencies

Line of Credit

We have available for use a credit line of $50.0 million in the United States. As of March 31, 2008, we had no borrowings outstanding on the line of credit. The credit line bears interest at the bank’s base rate and requires us, upon utilization of the credit line, to meet certain financial covenants with respect to limitations on losses. In the event the covenants are not met, the lender may require us to provide collateral to secure the outstanding balance. At March 31, 2008, we were in compliance with the covenants.

Litigation

We are a party to various litigation matters which we consider routine and incidental to our business. Management does not expect the results of any of these actions to have a material adverse effect on our business, results of operations or financial condition.

15

EMC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

11.  Segment Information

We manage our business in two broad categories: EMC Information Infrastructure and VMware Virtual Infrastructure. The EMC Information Infrastructure business operates in three segments: Information Storage, Content Management and Archiving, and RSA Information Security, while VMware Virtual Infrastructure operates in a single segment. Our management measures are designed to assess performance of these operating segments excluding certain items. As a result, the corporate reconciling items are used to capture the items excluded from the segment operating performance measures, including stock-based compensation expense and acquisition-related intangible asset amortization expense. Additionally, in certain instances, IPR&D charges, restructuring charges and infrequently occurring gains or losses are also excluded from the measures used by management in assessing segment performance. As a result of preparing separate financial statements for VMware’s initial public offering in August 2007, there have been some adjustments to VMware’s standalone consolidated financial statements that have been recorded in different periods by EMC and VMware. These differences are not material to the consolidated financial statements and segment disclosures of EMC. The VMware Virtual Infrastructure amounts represent the revenues and expenses of VMware as reflected within EMC’s consolidated financial statements. Research and development expenses, selling, general and administrative expenses, and other income associated with the EMC Information Infrastructure business are not allocated to the segments within the EMC Information Infrastructure business, as they are managed centrally at the business unit level. For the three segments within the EMC Information Infrastructure business, gross profit is the segment operating performance measure.

Our segment information for the three months ended March 31, 2008 and 2007 is as follows (tables in thousands, except percentages):

	EMC Information Infrastructure
	Information Storage			Content Management and Archiving			RSA Information Security			EMC Information Infrastructure			VMware Virtual Infrastructure within EMC			Corp Reconciling Items			Consolidated
Three Months Ended:
March 31, 2008
Revenues:
Systems revenues	$	1,433,190		$	2,521		$	4,412		$	1,440,123		$	—		$	—		$	1,440,123
Software revenues:
Software license		470,449			58,607			77,271			606,327			293,980			—			900,307
Software maintenance		291,556			73,758			28,785			394,099			112,119			—			506,218
Total software revenues		762,005			132,365			106,056			1,000,426			406,099			—			1,406,525
Other services revenues		516,634			50,317			24,389			591,340			32,071			—			623,411
Total revenues		2,711,829			185,203			134,857			3,031,889			438,170			—			3,470,059
Cost of sales		1,320,904			74,357			40,319			1,435,580			68,574			56,510			1,560,664
Gross profit	$	1,390,925		$	110,846		$	94,538			1,596,309			369,596			(56,510	)		1,909,395
Gross profit percentage		51.3	%		59.9	%		70.1	%		52.7	%		84.3	%					55.0	%
Research and development											294,505			97,173			41,836			433,514
Selling, general, and administrative											822,978			172,496			86,741			1,082,215
In-process research and development											—			—			79,204			79,204
Restructuring credits											(357	)		—			—			(357	)
Total costs and expenses											1,117,126			269,669			207,781			1,594,576
Operating income											479,183			99,927			(264,291	)		314,819
Other income, net											51,696			2,639			—			54,335
Income before taxes and minority interest										$	530,879		$	102,566		$	(264,291	)	$	369,154

16

EMC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

	EMC Information Infrastructure
	Information Storage			Content Management and Archiving			RSA Information Security			EMC Information Infrastructure			VMware Virtual Infrastructure within EMC			Corp Reconciling Items			Consolidated
Three Months Ended:
March 31, 2007
Revenues:
Systems revenues	$	1,302,740		$	68		$	2,958		$	1,305,766		$	—		$	—		$	1,305,766
Software revenues:
Software license		486,558			68,472			81,934			636,964			169,696			—			806,660
Software maintenance		234,796			60,339			21,627			316,762			65,318			—			382,080
Total software revenues		721,354			128,811			103,561			953,726			235,014			—			1,188,740
Other services revenues		402,834			43,319			13,342			459,495			21,004			—			480,499
Total revenues		2,426,928			172,198			119,861			2,718,987			256,018			—			2,975,005
Cost of sales		1,231,700			62,302			31,716			1,325,718			36,782			42,565			1,405,065
Gross profit	$	1,195,228		$	109,896		$	88,145			1,393,269			219,236			(42,565	)		1,569,940
Gross profit percentage		49.2	%		63.8	%		73.5	%		51.2	%		85.6	%					52.8	%
Research and development											270,327			59,510			25,555			355,392
Selling, general, and administrative											703,579			108,641			63,470			875,690
In-process research and development											—			—			—			—
Restructuring credits											(2,670	)		—			—			(2,670	)
Total costs and expenses											971,236			168,151			89,025			1,228,412
Operating income											422,033			51,085			(131,590	)		341,528
Other income, net											35,360			3,326			—			38,686
Income before taxes and minority interest										$	457,393		$	54,411		$	(131,590	)	$	380,214

Our revenues are attributed to the geographic areas according to the location of the customers. Revenues by geographic area are included in the following table (table in thousands):

	For the Three Months Ended
	March 31, 2008		March 31, 2007
United States	$	1,885,441	$	1,673,280
Europe, Middle East and Africa		1,052,607		873,286
Asia Pacific		379,787		320,929
Latin America, Mexico and Canada		152,224		107,510
Total	$	3,470,059	$	2,975,005

No country other than the United States accounted for 10% or more of revenues during the three months ended March 31, 2008 or 2007.

Long-lived assets, excluding financial instruments and deferred tax assets in the United States were $9,154.5 million at March 31, 2008 and $9,006.5 million at December 31, 2007. No country other than the United States accounted for 10% or more of these assets at March 31, 2008 or December 31, 2007. Long-lived assets, excluding financial instruments and deferred tax assets, internationally were $1,504.5 million at March 31, 2008 and $1,379.5 million at December 31, 2007.

For the three months ended March 31, 2008 and 2007, sales to Dell Inc. accounted for 12.5% and 13.5%, respectively, of our total revenues.

17

EMC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

12.  Income Taxes

Our effective income tax rate was 25.5% and 17.8% for the three months ended March 31, 2008 and 2007, respectively. The effective income tax rate is based upon the estimated income for the year, the composition of the income in different countries, and adjustments, if any, in the applicable quarterly periods for the potential tax consequences, benefits, resolutions of tax audits or other tax contingencies. For the three months ended March 31, 2008, the effective tax rate varied from the statutory tax rate as a result of the mix of income attributable to foreign versus domestic jurisdictions. Our aggregate income tax rate in foreign jurisdictions is lower than our income tax rate in the United States. The increase in the effective tax rate in 2008 compared to 2007 was primarily attributable to non-deductible IPR&D charges totaling $79.2 million during the quarter ended March 31, 2008 which increased the 2008 effective tax rate by 4.5%. During the three months ended March 31, 2007, we recognized net tax benefits of $19.9 million from reductions in income tax contingencies and the release of a valuation allowance recorded on certain foreign deferred tax assets which favorably impacted the 2007 effective tax rate by 5.2%.

13.  Subsequent Events

On April 1, 2008, EMC and Conchango PLC (“Conchango”) reached an agreement on the terms of a cash offer to Conchango’s stockholders to acquire the entire issued and to be issued outstanding shares of Conchango. The offer was made at 23.1 pence or $0.46 per Conchango share for an aggregate amount of 42.0 million British Sterling or $83.6 million. The acquisition is not expected to have a material impact on EMC’s financial results for the full 2008 fiscal year.

Conchango, headquartered in the United Kingdom, is a consultancy and systems integrator which specializes in innovative technologies and provides clients with solutions through business consulting, business intelligence, enterprise architecture and systems integration. This acquisition further expands and strengthens our Microsoft Solutions Practice within our Information Storage segment.

On April 8, 2008, EMC entered into an agreement and plan of merger to acquire Iomega Corporation (“Iomega”) in a cash tender offer of $3.85 per outstanding share, or approximately $213.0 million in the aggregate. EMC commenced and intends to complete the tender offer in the second quarter of 2008, subject to customary closing conditions and regulatory approvals. The acquisition is not expected to have a material impact on EMC’s financial results for the full 2008 fiscal year.

Iomega, headquartered in San Diego, California, provides data storage and network security solutions for small and mid-sized businesses and consumers. The addition of Iomega will enhance EMC’s reach and focus in the rapidly-growing consumer and small business markets. Upon completion of the acquisition, Iomega will serve as the core of EMC’s new consumer/small business products division within our Information Storage segment.

18

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our interim consolidated financial statements and notes thereto which appear elsewhere in this Quarterly Report on Form 10-Q and the MD&A contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 29, 2008. The following discussion contains forward-looking statements and should also be read in conjunction with the risk factors set forth in Item 1A of Part II of this Quarterly Report on Form 10-Q. The forward-looking statements do not include the impact of any potential mergers, acquisitions, divestitures, securities offerings or business combinations that may be announced or closed after the date hereof.

All dollar amounts expressed numerically in the MD&A are in millions, except per share amounts.

Certain tables may not add due to rounding.

INTRODUCTION

We manage our business in two broad categories: EMC Information Infrastructure and VMware Virtual Infrastructure.

EMC Information Infrastructure

Our EMC Information Infrastructure business consists of three of our segments: Information Storage, Content Management and Archiving and RSA Information Security. Our objective for our EMC Information Infrastructure business is to achieve profitable growth by increasing our operating income, measured on a cash basis, at a rate greater than our revenue growth. Management believes that by providing a combination of systems, software, services and solutions to meet customers’ needs, we will be able to further profitably increase revenues. Our efforts over the past few years have been primarily focused on growing revenues by enhancing and expanding our portfolio of offerings to satisfy our customers’ information infrastructure requirements. We have enhanced and expanded our portfolio of offerings through both internal research and development (“R&D”) and through acquisitions. We have increased our overall investment in R&D from $270.3 for the three months ended March 31, 2007 to $294.5 for the three months ended March 31, 2008. Additionally, we invested $304.5 on acquisitions during the three months ended March 31, 2008. These R&D expenditures and acquisitions have enabled us and will continue to enable us to introduce new and enhanced offerings. We plan to continue our R&D efforts to enable further innovation so we can continue to introduce new and enhanced offerings. Revenue from new and enhanced product offerings introduced in the last twelve months, including all product revenues from companies acquired during the last twelve months, contributed $810.6 of revenue to the three months ended March 31, 2008.

Concurrent with our objective of growing revenues, we are focused on controlling our costs. In 2008, we plan to focus on our indirect spending in order to reduce our overall operating expenses. This will enable us to further reinvest in R&D and add additional sales personnel in higher growth emerging markets and our commercial business.

VMware Virtual Infrastructure

Our VMware Virtual Infrastructure business has achieved significant revenue growth to date and is focused on extending its growth by broadening its product portfolio, enabling choice for customers and driving standards, expanding its network of technology and distribution partners, increasing market awareness and promoting the adoption of server virtualization. In addition to selling to new customers, VMware, Inc. (“VMware”) is also focused on expanding the use of its products within its existing customer base, as much of its license revenue is based on a per desktop or per server arrangement. VMware will continue to invest in its corporate infrastructure, including customer support, information technology and general and administrative functions.

The financial focus of VMware is on sustaining its growth in revenue to generate cash flow to expand its market share and its virtualization solutions. Although VMware is currently the leading provider of virtualization solutions, management believes the adoption by customers of virtualization solutions is at very early stages. The business expects to face competitive threats to its leadership position from a number of companies, some of whom may have significantly greater resources. As a result, management believes it is important to continue to invest in research and product development, sales and marketing and the support function to maintain or expand its leadership in the virtualization solutions market. This investment could result in contracting operating margins as VMware invests in its future.

19

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (Continued)

RESULTS OF OPERATIONS

Revenues

The following table presents revenue by our segments:

	For the Three Months Ended
	March 31, 2008		March 31, 2007		$ Change		% Change
Information Storage	$	2,711.8	$	2,426.9	$	284.9	11.7	%
Content Management and Archiving		185.2		172.2		13.0	7.5
RSA Information Security		134.9		119.9		15.0	12.5
VMware Virtual Infrastructure		438.2		256.0		182.2	71.2
Total revenues	$	3,470.1	$	2,975.0	$	495.1	16.6	%

The Information Storage segment revenues include systems, software and other services revenues. Systems revenues were $1,433.2 and $1,302.7 for the first quarter of 2008 and 2007, respectively, representing an increase of 10.0%. The increases in systems revenues were due to greater demand for these products attributable to increased demand for our Information Technology (“IT”) infrastructure offerings and a broadened product portfolio. Software revenues were $762.0 and $721.4 for the first quarter of 2008 and 2007, respectively, representing an increase of 5.6%. The 5.6% increase was due to a $56.8 or 24.2% increase in software maintenance revenues, partially offset by a decrease in software license revenues of $16.1 or 3.3%. Software maintenance revenues increased due to continued demand for support and unspecified upgrades from our installed base. The decline in software license revenues was due to a combination of factors, including existing systems’ customers migrating to higher end systems while continuing to utilize their existing software licenses and increased lower end systems sales which utilize less software. Revenue from new and enhanced product offerings introduced in the last twelve months, including all product revenue from companies acquired during the last twelve months, contributed $758.8 of revenue to the current quarter. Total other services were $516.6 and $402.8 for the first quarter of 2008 and 2007, respectively, representing an increase of 28.3%. Other services primarily consist of professional services and system maintenance which accounted for 78.8% and 17.3%, respectively, of the increase in other services revenue. The increase in professional services was due to greater demand for our professional services, largely to support and implement information lifecycle management-based solutions. In addition, revenue growth was driven by higher sales volume from our channel partners. Our channel partners accounted for 14.2% of the revenue growth in the first quarter of 2008.

The Content Management and Archiving segment revenues primarily include software revenues and other services revenues. Total software revenues were $132.4 and $128.8 for the three months ended March 31, 2008 and 2007, respectively, representing an increase of 2.8%. Revenue from new and enhanced product offerings introduced in the last twelve months, including all product revenues from companies acquired during the last twelve months, contributed $43.4 for the quarter ended March 31, 2008. The increase in software revenues was primarily due to an increase in software maintenance revenues of $13.4 or 22.2%, partially offset by a decrease in software license revenues of $9.9 or 14.4%. Software maintenance revenues increased due to continued demand for support and unspecified upgrades from our installed base. The decline in software license revenues was primarily due to lower demand in the United States. Other services consist primarily of professional services which accounted for 91.6% of the increase in other services revenue. The increase was due to greater demand for our professional services to support and implement solutions for managing increasing volumes of customers’ unstructured data.

The RSA Information Security segment revenues primarily include software revenues and other services revenues. Total software revenues were $106.1 and $103.6 for the three months ended March 31, 2008 and 2007, respectively, representing an increase of 2.4%. Revenue from new and enhanced product offerings introduced in the last twelve months, including all product revenues from companies acquired during the last twelve months, contributed $8.4 to the quarter ended March 31, 2008. The increase in software revenues was primarily due to an increase in software maintenance revenues of $7.2 or 33.1%, partially offset by a decrease in software license revenues of $4.7 or 5.7%. Software maintenance revenues increased due to continued demand for support and unspecified upgrades from our installed base. The decline in software license revenues was primarily due to lower demand. Other services increased $11.0 or 82.8%, as a result of increased demand for professional services.

20

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (Continued)

The VMware Virtual Infrastructure segment includes software license revenues and service revenues. Total revenues were $438.2 and $256.0 for the three months ended March 31, 2008 and 2007, respectively, representing an increase of 71.2%. Software license revenues increased by $124.3 or 73.2%, to $294.0 in the first quarter of 2008, compared with $169.7 in the first quarter of 2007. A significant majority of the revenue growth in the first quarter of 2008 compared to the first quarter of 2007 is the result of increased sales volumes, driven largely by greater demand for VMware’s virtualization product offerings attributable to wider market acceptance of virtualization as part of organizations’ IT infrastructure, a broadened product portfolio and expansion of VMware’s network of indirect channel partners. Although VMware expects license revenue to continue to grow throughout 2008, it expects the rate of growth to decelerate due primarily to the size and scale of the business and a shift to more customers entering into enterprise agreements. Under an enterprise agreement, a portion of the revenue is attributed to the license and recognized immediately, but the majority is deferred and recognized as services revenue in future periods. As VMware increases sales of enterprise agreements, it expects to have some shift in the mix of revenues so that license revenue will compose a smaller proportion of the revenue mix and revenue growth in 2008. Software maintenance and services revenues increased by $57.9 or 67.1%, to $144.2 in the first quarter of 2008, compared with $86.3 in the first quarter of 2007. Software maintenance and services revenues primarily consist of software maintenance and professional services revenues. The increase in software maintenance and services revenues in the first quarter of 2008 was primarily attributable to growth in VMware’s software maintenance revenues and to a lesser extent growth in VMware’s professional services revenue. Software maintenance revenue growth reflects the increase in VMware’s license revenues and renewals to customer contracts. Professional services revenue growth reflects increased demand for design and implementation services and training programs, as end-user organizations deployed virtualization across their organizations. Given the reasons cited above, including the increased number of multi-year enterprise agreements, VMware expects that service revenue will compose a larger proportion of its revenue mix and revenue growth in 2008.

Consolidated revenues by geography were as follows:

	For the Three Months Ended
	March 31, 2008		March 31, 2007		% Change
United States	$	1,885.4	$	1,673.3	12.7	%
Europe, Middle East and Africa		1,052.6		873.3	20.5
Asia Pacific		379.8		320.9	18.4
Latin America, Mexico and Canada		152.2		107.5	41.6

Revenue increased for the three months ended March 31, 2008 compared to the same period in 2007 in all of our markets due to greater demand for our products and services. Changes in exchange rates favorably impacted revenue growth by 2.3% for the three months ended March 31, 2008. The impact of the change in rates in both periods was most significant in the European market, primarily Germany, France, Italy and the United Kingdom.

21

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (Continued)

Costs and Expenses

The following table presents our costs and expenses, other income and net income.

	For the Three Months Ended
	March 31, 2008			March 31, 2007			$ Change			% Change
Cost of revenue:
Information Storage	$	1,320.9		$	1,231.7		$	89.2		7.2	%
Content Management and Archiving		74.4			62.3			12.1		19.4
RSA Information Security		40.3			31.7			8.6		27.1
VMware Virtual Infrastructure		68.6			36.8			31.8		86.4
Corporate reconciling items		56.5			42.6			13.9		32.6
Total cost of revenue		1,560.7			1,405.1			155.6		11.1
Gross margins:
Information Storage		1,390.9			1,195.2			195.7		16.4
Content Management and Archiving		110.8			109.9			0.9		0.8
RSA Information Security		94.5			88.1			6.4		7.3
VMware Virtual Infrastructure		369.6			219.2			150.4		68.6
Corporate reconciling items		(56.5	)		(42.6	)		(13.9	)	32.6
Total gross margin		1,909.4			1,569.9			339.5		21.6
Operating expenses:
Research and development (1)		433.5			355.4			78.1		22.0
Selling, general and administrative (2)		1,082.2			875.7			206.5		23.6
In-process research and development		79.2			—			79.2		NM
Restructuring credits		(0.4	)		(2.7	)		2.3		(85.2	)
Total operating expenses		1,594.6			1,228.4			366.2		29.8
Operating income		314.8			341.5			(26.7	)	(7.8	)
Investment income, interest expense and other income, net		54.3			38.7			15.6		40.3
Income before income taxes		369.2			380.2			(11.0	)	(2.9	)
Provision for income taxes		94.2			67.6			26.6		39.3
Minority interest, net of taxes		(6.2	)		—			(6.2	)	NM
Net income	$	268.8		$	312.6		$	(43.8	)	(14.0	)%

(1) Amount includes reconciling items of $41.8 and $25.6 for the three months ended March 31, 2008 and 2007, respectively. See footnote 11 for additional information regarding corporate reconciling items.

(2) Amount includes reconciling items of $86.7 and $63.5 for the three months ended March 31, 2008 and 2007, respectively. See footnote 11 for additional information regarding corporate reconciling items.

NM – not measurable

Gross Margins

Overall our gross margin percentages were 55.0% and 52.8% for the three months ended March 31, 2008 and 2007, respectively. The improvement in the gross margin percentage in the first quarter of 2008 compared to 2007 was attributable to the VMware Virtual Infrastructure segment, which contributed 163 basis points and the Information Storage segment which contributed 131 basis points. These improvements were partially offset by gross margin declines in the Content Management and Archiving segment, which decreased overall gross margins by 19 basis points, and the RSA Information Security segment, which decreased overall gross margins by 5 basis points. The increase in corporate reconciling items, consisting of stock-based compensation and acquisition-related intangible asset amortization, decreased the consolidated gross margin percentage by 50 basis points.

22

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (Continued)

For segment reporting purposes, stock-based compensation and acquisition-related intangible asset amortization are recognized as corporate expenses and are not allocated among our various operating segments. The increase of $13.9 in the corporate reconciling items for the quarter ended March 31, 2008 was attributable to a $9.1 increase in intangible asset amortization expense associated with acquisitions and a $4.8 increase in stock-based compensation expense attributable to grants of equity-based compensation made in conjunction with VMware’s initial public offering in the third quarter of 2007.

The gross margin percentages for the Information Storage segment were 51.3% and 49.2% for the three months ended March 31, 2008 and 2007, respectively. The increase was primarily attributable to our ability to achieve higher gross margins from our focus on selling overall solutions to our customers.

The gross margin percentages for the Content Management and Archiving segment were 59.9% and 63.8% for the three months ended March 31, 2008 and 2007, respectively. The decrease in the gross margin percentage for the three months ended March 31, 2008 compared to the comparable 2007 period was primarily due to a decrease in the mix of software license revenues as a percentage of total segment revenues. Software license revenues as a percentage of total revenues decreased from 39.8% for the three months ended March 31, 2007 to 31.6% for the three months ended March 31, 2008. Software license revenues generally provide a higher gross margin percentage than services revenues.

The gross margin percentages for the RSA Information Security segment were 70.1% and 73.5% for the three months ended March 31, 2008 and 2007, respectively. The decrease in the gross margin percentage for the three months ended March 31, 2008 compared to the comparable 2007 period was primarily due to a decrease in the mix of software license revenues as a percentage of total segment revenues. Software license revenues as a percentage of total revenues decreased from 68.4% for the three months ended March 31, 2007 to 57.3% for the three months ended March 31, 2008. Software license revenues generally provide a higher gross margin percentage than services revenues.

The gross margin percentages for VMware Virtual Infrastructure were 84.3% and 85.6% for the three months ended March 31, 2008 and 2007, respectively. The decrease in the gross margin percentage for the three months ended March 31, 2008 compared to the comparable 2007 period was primarily attributable to increased direct support, professional services personnel and third-party professional services costs to support the increased services revenues.

Research and Development

As a percentage of revenues, R&D expenses were 12.5% and 11.9% for the first quarters of 2008 and 2007, respectively. R&D expenses increased $78.1 for the three months ended March 31, 2008 compared to the same period in 2007, primarily due to higher personnel-related costs, including salaries, benefits, recruiting, contract labor and consulting, and higher cost of facilities. Personnel-related costs increased by $76.4 and the cost of facilities increased by $5.9 for the three months ended March 31, 2008 compared to the same period in 2007. Partially offsetting the increase was a reduction in the cost of materials to support new product development of $2.6.

Corporate reconciling items within R&D consist of stock-based compensation and intangible asset amortization. These costs increased $16.2 to $41.8 for the three months ended March 31, 2008. Stock-based compensation expense increased $15.4 and intangible asset amortization increased $0.8 for the three months ended March 31, 2008. The increase in stock-based compensation expense consisted of a $14.5 increase within the VMware Virtual Infrastructure business and a $0.9 increase within EMC’s Information Infrastructure business. The increase in stock-based compensation within the VMware Virtual Infrastructure business was primarily attributable to grants of equity-based compensation made in conjunction with VMware’s initial public offering. For segment reporting purposes, corporate reconciling items are not allocated to our various operating segments.

R&D expenses within EMC’s Information Infrastructure business, as a percentage of EMC’s Information Infrastructure business revenues, were 9.7% and 9.9% for the three months ended March 31, 2008 and 2007, respectively. R&D expenses increased $24.2 for the three months ended March 31, 2008 compared to the same period in 2007, primarily due to higher personnel-related costs and increased facilities costs which increased by $24.8 and $4.0, respectively. Partially offsetting the increase was a reduction in the cost of materials to support new product development of $2.6 and an increase in capitalized software development costs of $2.4 which reduced R&D costs.

23

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (Continued)

R&D expenses within the VMware Virtual Infrastructure business, as a percentage of VMware’s revenues, were 22.2% and 23.2% for the three months ended March 31, 2008 and 2007, respectively. R&D expenses increased $37.7 for the three months ended March 31, 2008 compared to the same period in 2007. The increase in R&D expenses was primarily attributable to incremental headcount to support the growth of VMware’s business. The increase in R&D expenses consisted primarily of increased salaries, benefits expense and consulting fees, resulting from the deployment of additional resources to support new product development.

Selling, General and Administrative

As a percentage of revenues, selling, general and administrative (“SG&A”) expenses were 31.2% and 29.4% for the three months ended March 31, 2008 and 2007, respectively. SG&A expenses increased by $206.5 for the three months ended March 31, 2008 compared to the same period in 2007, primarily due to higher personnel-related costs, depreciation, travel costs and facilities costs to support the overall growth of the business. Personnel-related costs increased by $144.7, depreciation increased by $13.1, travel increased by $10.9 and facilities increased by $7.2 for the three months ended March 31, 2008 compared to the same period in 2007.

Corporate reconciling items within SG&A, which consist of stock-based compensation and intangible asset amortization, increased $23.2 to $86.7 for the three months ended March 31, 2008 compared to the same period in 2007. Stock-based compensation increased $15.6 for the three months ended March 31, 2008. Intangible asset amortization increased $7.6 for the three months ended March 31, 2008. The increase in stock-based compensation consisted of a $12.8 increase within the VMware Virtual Infrastructure business and a $2.8 increase within EMC’s Information Infrastructure business. The increase in stock-based compensation within the VMware Virtual Infrastructure business for the three months ended March 31, 2008 was primarily attributable to grants of equity-based compensation made in conjunction with VMware’s initial public offering in the third quarter of 2007. The increase in intangible asset amortization was primarily attributable to amortization of intangible assets associated with acquisitions by both EMC’s Information Infrastructure business and VMware Virtual Infrastructure business. For segment reporting purposes, corporate reconciling items are not allocated to our various operating segments.

SG&A expenses within EMC’s Information Infrastructure business, as a percentage of EMC’s Information Infrastructure business revenues were 27.1% and 25.9% for the three months ended March 31, 2008 and 2007, respectively. SG&A expenses increased by $119.4 for the three months ended March 31, 2008 compared to the same period in 2007, primarily due to higher personnel-related costs, depreciation, travel costs and facilities costs to support the overall growth of the business. Personnel-related costs increased by $84.2, depreciation increased by $9.1, travel increased by $6.2 and facilities increased by $2.6 for the three months ended March 31, 2008 compared to the same period in 2007.

SG&A expenses within the VMware Virtual Infrastructure business, as a percentage of VMware’s revenues were 39.4% and 42.4% for the three months ended March 31, 2008 and 2007, respectively. SG&A expenses increased $63.9 for the three months ended March 31, 2008 compared to the same period in 2007. The increase in SG&A expenses in the first quarter of 2008 was primarily the result of higher salaries and benefits costs due to increases in sales, marketing and administrative personnel. The resources were added to support the growth of the business, including greater finance and legal personnel in response to being a public company, as well as higher commission expense resulting from increased sales volume.

In-Process Research and Development

In-process research and development (“IPR&D”) was $79.2 for the three months ended March 31, 2008. There was no IPR&D for the three months ended March 31, 2007. Two IPR&D projects related to the acquisition of Pi Corporation (“Pi”) and one IPR&D project related to the acquisition of Infra Corporation Pty Limited (“Infra”) were identified and written off at the time of the respective date of each acquisition because they had no alternative uses and had not reached technological feasibility. The value assigned to the IPR&D was determined utilizing the income approach by determining cash flow projections relating to the identified IPR&D projects. The stage of completion of each in-process project was estimated to determine the discount rates to be applied to the valuation of the in-process technology. Based upon the level of completion and the risk associated with the in-process technology, we applied a discount rate of 50% for the Pi IPR&D projects and 20% for the Infra IPR&D project.

24

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (Continued)

Restructuring Credits

During the three months ended March 31, 2008 and 2007, we recognized restructuring credits of $0.4 and $2.7, respectively.

The restructuring credit for the three months ended March 31, 2008 was primarily attributable to lower than expected severance payments on our 2006 restructuring programs partially offset by higher than expected severance payments on our 2007 and prior restructuring programs.

The restructuring credit for the three months ended March 31, 2007 was primarily attributable to lower than expected costs associated with vacating leased facilities in our prior restructuring programs.

The activity for the 2007 restructuring program for the three months ended March 31, 2008 is presented below:

2007 Restructuring Program

Three Months Ended March 31, 2008

Category	Balance as of December 31, 2007		Adjustment to the Provision		Utilization			Balance as of March 31, 2008
Workforce reductions	$	12.4	$	5.3	$	(6.5	)	$	11.2
Total	$	12.4	$	5.3	$	(6.5	)	$	11.2

The 2007 restructuring program commenced in the fourth quarter of 2007 and included approximately 450 employees. These actions impacted the Information Storage, Content Management and Archiving and RSA Information Security segments. The adjustment to the provision in 2008 was primarily attributable to finalizing severance payments. Approximately 400 employees included in this plan have been terminated and the remaining cash portion owed for the 2007 restructuring plan is $11.2 which is expected to be substantially paid out through December 31, 2008.

2006 Restructuring Programs

The activity for the 2006 restructuring programs for the three months ended March 31, 2008 and 2007 is presented below:

Three Months Ended March 31, 2008

Category	Balance as of December 31, 2007		Adjustment to the Provision			Utilization			Balance as of March 31, 2008
Workforce reductions	$	83.2	$	(5.7	)	$	(27.7	)	$	49.7
Consolidation of excess facilities		2.6		(0.1	)		—			2.5
Total	$	85.7	$	(5.8	)	$	(27.7	)	$	52.2

Three Months Ended March 31, 2007

Category	Balance as of December 31, 2006		Adjustment to the Provision		Utilization			Balance as of March 31, 2007
Workforce reductions	$	127.8	$	—	$	(20.3	)	$	107.5
Consolidation of excess facilities		5.5		0.4		(0.5	)		5.4
Contractual and other obligations		4.8		—		(4.3	)		0.5
Total	$	138.2	$	0.4	$	(25.1	)	$	113.4

The adjustment to the provision in 2008 results from finalizing severance payments. Substantially all employees included in these programs have been terminated. The remaining cash balance associated with workforce reductions is $43.2 and is expected to be substantially paid out through 2008. The remaining balance owed for the consolidation of excess facilities is expected to be paid out through 2018.

25

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (Continued)

Prior Restructuring Programs

We implemented restructuring programs from 1998 through 2005. The activity for these programs for the three months ended March 31, 2008 and 2007, respectively, is presented below:

Three Months Ended March 31, 2008

Category	Balance as of December 31, 2007		Adjustment to the Provision		Utilization			Balance as of March 31, 2008
Workforce reductions	$	1.3	$	0.1	$	(0.5	)	$	0.9
Consolidation of excess facilities		25.7		—		(3.2	)		22.5
Other contractual obligations		0.8		0.1		—			0.9
Total	$	27.8	$	0.2	$	(3.7	)	$	24.3

Three Months Ended March 31, 2007

Category	Balance as of December 31, 2006		Adjustment to the Provision			Utilization			Balance as of March 31, 2007
Workforce reductions	$	19.2	$	—		$	(9.4	)	$	9.9
Consolidation of excess facilities		40.2		(3.0	)		(2.6	)		34.6
Other contractual obligations		1.9		—			—			1.9
Total	$	61.4	$	(3.0	)	$	(11.9	)	$	46.4

All employees included in these programs have been terminated. The remaining balance owed for the consolidation of excess facilities is expected to be paid out through 2015.

Investment Income

Investment income was $77.1 and $52.1 for the three months ended March 31, 2008 and 2007, respectively. Investment income increased for the three months ended March 31, 2008 compared to the same period in 2007 due to higher average outstanding cash and investment balances and lower realized losses on investments. The weighted average return on investments, excluding realized losses and gains, was 3.8% and 4.3% for the first quarters of 2008 and 2007, respectively.

Interest Expense

Interest expense was $18.0 and $18.3 for the three months ended March 31, 2008 and 2007, respectively. Interest expense consists primarily of interest on the Notes.

Other (Expense) Income, Net

Other (expense) income, net was $(4.8) and $4.8 for the three months ended March 31, 2008 and 2007, respectively. The change was primarily attributable to an increase in foreign currency transaction losses.

Provision for Income Taxes

Our effective income tax rate was 25.5% and 17.8% for the three months ended March 31, 2008 and 2007, respectively. The effective income tax rate is based upon the estimated income for the year, the composition of the income in different countries, and adjustments, if any, in the applicable quarterly periods for the potential tax consequences, benefits, resolutions of tax audits or other tax contingencies. For the three months ended March 31, 2008, the effective tax rate varied from the statutory tax rate as a result of the mix of income attributable to foreign versus domestic jurisdictions. Our aggregate income tax rate in foreign jurisdictions is lower than our income tax rate in the United States. The increase in the effective tax rate in 2008 compared to 2007

26

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (Continued)

was primarily attributable to non-deductible IPR&D charges totaling $79.2 during the quarter ended March 31, 2008 which increased the 2008 effective tax rate by 4.5%. During the three months ended March 31, 2007, we recognized net tax benefits of $19.9 from reductions in income tax contingencies and the release of a valuation allowance recorded on certain foreign deferred tax assets which favorably impacted the 2007 effective tax rate by 5.2%.

Minority Interests

As a result of VMware’s initial public offering in the third quarter of 2007, VMware is no longer a wholly-owned subsidiary of EMC. For the three months ended March 31, 2008, the weighted average minority interest in VMware was 14.3%, resulting in a minority interest expense of $6.2.

Financial Condition

Cash provided by operating activities was $918.3 and $808.7 for the three months ended March 31, 2008 and 2007, respectively. Cash received from customers was $4,066.8 and $3,298.6 for the three months ended March 31, 2008 and 2007, respectively. The increase in cash received from customers was attributable to higher sales volume and greater cash proceeds from the sale of maintenance contracts, which are typically billed and paid in advance of services being rendered. Cash paid to suppliers and employees was $3,056.8 and $2,471.5 for the three months ended March 31, 2008 and 2007, respectively. The increase was partially attributable to higher headcount. Total headcount was approximately 38,600 and 31,700 at March 31, 2008 and 2007, respectively. The headcount increase was due to the growth of the business, as well as continued acquisition activity. Inventory increased from $877.2 at December 31, 2007 to $953.1 at March 31, 2008. The increase was primarily attributable to higher inventory levels to ensure customer demand would be met. Cash received from dividends and interest was $78.0 and $57.8 for the three months ended March 31, 2008 and 2007, respectively. For the quarters ended March 31, 2008 and 2007, we paid $166.8 and $73.0, respectively, in income taxes. These payments are comprised of estimated taxes for the current year, extension payments for the prior year and refunds or payments associated with income tax filings and tax audits.

Cash provided by investing activities was $46.5 and $73.8 for the three months ended March 31, 2008 and 2007, respectively. Cash paid for acquisitions, net of cash acquired was $337.8 and $3.3 for the quarter ended March 31, 2008 and 2007, respectively. The $334.5 increase in cash paid for acquisitions when compared to the comparable prior period is primarily attributable to increased acquisition activity. Capital additions were $146.5 and $170.5 for the three months ended March 31, 2008 and 2007, respectively. The lower level of capital additions was primarily due to lower spending on infrastructure for the three months ended March 31, 2008 compared to the three months ended March 31, 2007. Capital software development costs were $54.3 and $51.9 for the first three months ended March 31, 2008 and 2007, respectively. Net sales and maturities of investments were $588.2 and $300.4 for the first three months ended March 31, 2008 and 2007, respectively. This activity varies from period to period based upon our cash collections, cash requirements and maturity dates of our investments.

Cash used in financing activities was $480.3 and $370.9 for the three months ended March 31, 2008 and 2007, respectively. For the three months ended March 31, 2008 and 2007, we spent $557.2 and $488.7 to repurchase 35.9 million and 35.2 million shares of our common stock, respectively. We plan to spend a total of $1,000.0 to $1,500.0 on common stock repurchases during 2008, however the number of shares purchased and timing of our purchases will be dependent upon a number of factors, including the price of our stock, market conditions, our cash position and alternative demands for our cash resources. We generated $51.1 and $103.3 during the three months ended March 31, 2008 and 2007, respectively, from the exercise of stock options.

We have a credit line of $50.0 in the United States. As of March 31, 2008, we had no borrowings outstanding on the line of credit. The credit line bears interest at the bank’s base rate and requires us, upon utilization of the credit line, to meet certain financial covenants with respect to limitations on losses. In the event the covenants are not met, the lender may require us to provide collateral to secure the outstanding balance. At March 31, 2008, we were in compliance with the covenants. As of March 31, 2008, the aggregate amount of liabilities of our subsidiaries was approximately $3,100.

At March 31, 2008, our total cash, cash equivalents, and short-term and long-term investments were $7,860.4. This balance includes approximately $1,300 held by VMware and $2,900 held by EMC in overseas entities.

At December 31, 2007, we held $972.5 of auction rate securities and classified these as short-term investments. We have liquidated a portion of these securities through March 31, 2008 reducing our holdings in auction rate securities to $273.9 or 3.5% of our total cash, cash equivalents and investments of $7,860.4 at March 31, 2008. As a result of the volatility in the credit markets,

27

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (Continued)

the occurrence of failures of auctions for our auction rate securities and the related impact on the liquidity of these securities, we classified our auction rate securities as long-term investments at March 31, 2008 and we recognized a $14.6 temporary decline in their value that is included within other comprehensive income. As a result of the declined liquidity of auction rate securities, active quoted market prices are not currently available for auction rate securities. Therefore, to determine the estimated fair value of our investment in auction rate securities we utilized a discounted cash flow model. The assumptions used in preparing the discounted cash flow model include an incremental discount rate for the lack of liquidity in the market (“liquidity discount margin”) for an estimated period of time. The discount rate we selected was based on AA-rated banks as the majority of our portfolio is invested in student loans where EMC acts as a financier to these lenders. The liquidity discount margin represents an estimate of the additional return an investor would require for the lack of liquidity of these securities over an estimated two-year holding period. We believe the underlying assumptions in the model, specifically the liquidity discount margin of 2% and an estimated holding period of two years, are reasonable based upon the estimated premium required to hold a similar investment with a similar duration and our experience in liquidating these investments since December 31, 2007. Our investment in auction rate securities is primarily composed of student loans that are supported by the federal government as part of the Federal Family Education Loan Program (FFELP) through the U.S. Department of Education, or to a lesser extent are obligations of municipalities rated single-A or higher. We believe the quality of the collateral underlying these securities will enable us to recover our principal balance.

At March 31, 2008, we held $240.8 of asset and mortgage-backed securities or 3.1% of our total cash, cash equivalents and investment of $7,860.4. These asset and mortgage-backed securities are AAA-rated and the assets underlying these securities are generally residential or commercial mortgage obligations, automobile loans, credit card loans, equipment loans or home equity loans. These securities are not collateralized by subprime mortgages. The average maturity is 1.0 year and 2.4 years for the asset-backed and mortgaged-backed securities, respectively.

At March 31, 2008, we held $4,978.4 of cash and cash equivalents where the maturity is 90 days or less. Due to the nature of these assets, we consider it reasonable to expect that their fair market values will not be significantly impacted by a change in interest rates.

The remaining $2,882.0 held at March 31, 2008 was invested in short and long-term investments consisting of U.S government and agency obligations, U.S. corporate debt securities, asset and mortgage-backed securities, auction rate securities, municipal obligations and foreign debt securities. Included in the $2,882.0 was $273.9 of auction rate securities valued using unobservable inputs. As of March 31, 2008, a 100 basis point change in the unobservable discount rate resulting from a different holding period would result in a change of approximately $5.4 in the fair value of the auction rate securities.

To date, inflation has not had a material impact on our financial results.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For quantitative and qualitative disclosures about market risk affecting us, see Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K filed with the SEC on February 29, 2008. Our exposure to market risks has not changed materially from that set forth in our Annual Report.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our principal executive officer and principal financial officer have concluded that as of such date, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting. There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

28

PART II

OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

We are a party to various litigation matters which we consider routine and incidental to our business. Management does not expect the results of any of these actions to have a material adverse effect on our business, results of operations or financial condition.

Item 1A. RISK FACTORS

The risk factors that appear below could materially affect our business, financial condition and results of operations. The risks and uncertainties described below are not the only risks and uncertainties facing us. Our business is also subject to general risks and uncertainties that affect many other companies.

Our business could be materially adversely affected as a result of general economic and market conditions.

We are subject to the effects of general global economic and market conditions. If these conditions deteriorate, our business, results of operations or financial condition could be materially adversely affected.

Our business could be materially adversely affected as a result of a lessening demand in the information technology market.

Our revenue and profitability depend on the overall demand for our products and services. Delays or reductions in IT spending, domestically or internationally, could materially adversely affect demand for our products and services which could result in decreased revenues or earnings.

Our customers operate in a variety of markets, including the financial services, credit and housing and construction markets. Any adverse effects to such markets could materially adversely affect demand for our products and services which could result in decreased revenues or earnings.

Competitive pricing, sales volume, mix and component costs could materially adversely affect our revenues, gross margins and earnings.

Our gross margins are impacted by a variety of factors, including competitive pricing, component and product design costs as well as the volume and relative mixture of product and services revenues. Increased component costs, increased pricing pressures, the relative and varying rates of increases or decreases in component costs and product price, changes in product and services revenue mixture or decreased volume could have a material adverse effect on our revenues, gross margins or earnings.

The costs of third-party components comprise a significant portion of our product costs. While we generally have been able to manage our component and product design costs, we may have difficulty managing such costs if supplies of certain components become limited or component prices increase. Any such limitation could result in an increase in our component costs. An increase in component or design costs relative to our product prices could have a material adverse effect on our gross margins and earnings. Moreover, certain competitors may have advantages due to vertical integration of their supply chain, which may include disk drives, microprocessors, memory components and servers.

The markets in which we do business are highly competitive and we encounter aggressive price competition for all of our products and services from numerous companies globally. There also has been and may continue to be a willingness on the part of certain competitors to reduce prices or provide information infrastructure and virtual infrastructure products or services, together with other IT products or services, at minimal or no additional cost in order to preserve or gain market share. Such price competition may result in pressure on our product and service prices, and reductions in product and service prices may have a material adverse effect on our revenues, gross margins and earnings. We currently believe that pricing pressures are likely to continue.

Our financial performance may be impacted by the financial performance of VMware.

Because we consolidate VMware’s financial results in our results of operations, our financial performance will be impacted by the financial performance of VMware. VMware’s financial performance may be affected by a number of factors, including, but not limited to:

• rates of customer adoption for virtualization solutions;

29

• fluctuations in demand, adoption, sales cycles and pricing levels for VMware’s products and services;

• changes in customers’ budgets for information technology purchases and in the timing of their purchasing decisions;

• VMware’s ability to compete with existing or new competitors;

• the timing of recognizing revenue in any given quarter as a result of software revenue recognition policies;

• the sale of VMware products in the timeframes they anticipate, including the number and size of orders in each quarter;

• VMware’s ability to develop, introduce and ship in a timely manner new products and product enhancements that meet customer demand, certification requirements and technical requirements;

• the amount of equity-based compensation expense as a result of VMware equity grants;

• VMware’s ability to effectively manage future growth and acquisitions;

• changes to VMware’s effective tax rate;

• the increasing scale of VMware’s business and its effect on VMware’s ability to maintain historical rates of growth;

• the timing of the announcement or release of products or upgrades by VMware or by its competitors;

• VMware’s ability to implement scalable systems of internal controls;

• VMware’s ability to control costs, including its operating expenses;

• VMware’s ability to attract and retain highly skilled employees, particularly those with relevant experience in software development and sales; and

• general economic conditions in VMware’s domestic and international markets.

Our stock price is volatile and may be affected by the trading price of VMware Class A common stock and/or speculation about the possibility of future actions we might take in connection with our VMware stock ownership.

Our stock price, like that of other technology companies, is subject to significant volatility because of factors such as:

• the announcement of acquisitions, new products, services or technological innovations by us or our competitors;

• quarterly variations in our operating results;

• changes in revenue or earnings estimates by the investment community; and

• speculation in the press or investment community.

The trading price of our common stock has been and likely will continue to be affected by various factors related to VMware, including:

• the trading price for VMware Class A common stock;

• actions taken or statements made by us, VMware, or others concerning the potential separation of VMware from us, including by spin-off, split-off or sale; and

• factors impacting the financial performance of VMware, including those discussed in the prior risk factor.

In addition, although we own a majority of VMware and consolidate their results, our stock price may not reflect our pro rata ownership interest of VMware.

If our suppliers are not able to meet our requirements, we could have decreased revenues and earnings.

We purchase or license many sophisticated components and products from one or a limited number of qualified suppliers, including some of our competitors. These components and products include disk drives, high density memory components, power supplies and software developed and maintained by third parties. We have experienced delivery delays from time to time because of high industry demand or the inability of some vendors to consistently meet our quality or delivery requirements. If any of our suppliers were to cancel or materially change contracts or commitments with us or fail to meet the quality or delivery requirements needed to satisfy customer orders for our products, we could lose time-sensitive customer orders, be unable to develop or sell certain products cost-effectively or on a timely basis, if at all, and have significantly decreased quarterly revenues and earnings,

30

which would have a material adverse effect on our business, results of operations and financial condition. Additionally, we periodically transition our product line to incorporate new technologies. The importance of transitioning our customers smoothly to new technologies, along with our historically uneven pattern of quarterly sales, intensifies the risk that the failure of a supplier to meet our quality or delivery requirements will have a material adverse impact on our revenues and earnings.

Our business could be materially adversely affected as a result of the risks associated with acquisitions and investments.

As part of our business strategy, we seek to acquire businesses that offer complementary products, services or technologies. These acquisitions are accompanied by the risks commonly encountered in an acquisition of a business, which may include, among other things:

• the effect of the acquisition on our financial and strategic position and reputation;

• the failure of an acquired business to further our strategies;

• the failure of the acquisition to result in expected benefits, which may include benefits relating to enhanced revenues, technology, human resources, cost savings, operating efficiencies and other synergies;

• the difficulty and cost of integrating the acquired business, including costs and delays in implementing common systems and procedures and costs and delays caused by communication difficulties or geographic distances between the two companies’ sites;

• the assumption of liabilities of the acquired business, including litigation-related liability;

• the potential impairment of acquired assets;

• the lack of experience in new markets, products or technologies or the initial dependence on unfamiliar supply or distribution partners;

• the diversion of our management’s attention from other business concerns;

• the impairment of relationships with customers or suppliers of the acquired business or our customers or suppliers;

• the potential loss of key employees of the acquired company; and

• the potential incompatibility of business cultures.

These factors could have a material adverse effect on our business, results of operations or financial condition. To the extent that we issue shares of our common stock or other rights to purchase our common stock in connection with any future acquisition, existing shareholders may experience dilution. Additionally, regardless of the form of consideration issued, acquisitions could negatively impact our net income and our earnings per share.

In addition to the risks commonly encountered in the acquisition of a business as described above, we may also experience risks relating to the challenges and costs of closing a transaction. Further, the risks described above may be exacerbated as a result of managing multiple acquisitions at the same time.

In 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 141(R) “Business Combinations.” The standard, which is effective commencing in our 2009 fiscal year, will result in significant changes in accounting for acquisitions. Depending upon the number of and magnitude of acquisitions which we may consummate in 2009, the standard could have a material adverse effect on our business, results of operations and financial condition.

We also seek to invest in businesses that offer complementary products, services or technologies. These investments are accompanied by risks similar to those encountered in an acquisition of a business.

We may be unable to keep pace with rapid industry, technological and market changes.

The markets in which we compete are characterized by rapid technological change, frequent new product introductions, evolving industry standards and changing needs of customers. There can be no assurance that our existing products will be properly positioned in the market or that we will be able to introduce new or enhanced products into the market on a timely basis, or at all. We spend a considerable amount of money on research and development and introduce new products from time to time. There can be no assurance that enhancements to existing products and solutions or new products and solutions will receive customer acceptance. As competition in the IT industry increases, it may become increasingly difficult for us to maintain a technological advantage and to leverage that advantage toward increased revenues and profits.

31

Risks associated with the development and introduction of new products include delays in development and changes in data storage, networking virtualization, infrastructure management, information security and operating system technologies which could require us to modify existing products. Risks inherent in the transition to new products include:

• the difficulty in forecasting customer preferences or demand accurately

• the inability to expand production capacity to meet demand for new products

• the impact of customers’ demand for new products on the products being replaced, thereby causing a decline in sales of existing products and an excessive, obsolete supply of inventory

• delays in initial shipments of new products

Further risks inherent in new product introductions include the uncertainty of price-performance relative to products of competitors, competitors’ responses to the introductions and the desire by customers to evaluate new products for extended periods of time. Our failure to introduce new or enhanced products on a timely basis, keep pace with rapid industry, technological or market changes or effectively manage the transitions to new products or new technologies could have a material adverse effect on our business, results of operations or financial condition.

The markets we serve are highly competitive and we may be unable to compete effectively.

We compete with many companies in the markets we serve, certain of which offer a broad spectrum of IT products and services and others which offer specific information storage, management or virtualization products or services. Some of these companies (whether independently or by establishing alliances) may have substantially greater financial, marketing and technological resources, larger distribution capabilities, earlier access to customers and greater opportunity to address customers’ various IT requirements than us. In addition, as the IT industry consolidates, companies may improve their competitive position and ability to compete against us. We compete on the basis of our products’ features, performance and price as well as our services. Our failure to compete on any of these bases could affect demand for our products or services, which could have a material adverse effect on our business, results of operations or financial condition.

Companies may develop new technologies or products in advance of us or establish business models or technologies disruptive to us. Our business may be materially adversely affected by the announcement or introduction of new products, including hardware and software products and services by our competitors, and the implementation of effective marketing or sales strategies by our competitors. The material adverse effect to our business could include a decrease in demand for our products and services and an increase in the length of our sales cycle due to customers taking longer to compare products and services and to complete their purchases.

We may have difficulty managing operations.

Our future operating results will depend on our overall ability to manage operations, which includes, among other things:

• retaining and hiring, as required, the appropriate number of qualified employees

• managing, protecting and enhancing, as appropriate, our infrastructure, including but not limited to, our information systems and internal controls

• accurately forecasting revenues

• training our sales force to sell more software and services

• successfully integrating new acquisitions

• managing inventory levels, including minimizing excess and obsolete inventory, while maintaining sufficient inventory to meet customer demands

• controlling expenses

• managing our manufacturing capacity, real estate facilities and other assets

• executing on our plans

An unexpected decline in revenues without a corresponding and timely reduction in expenses or a failure to manage other aspects of our operations could have a material adverse effect on our business, results of operations or financial condition.

32

Our investment portfolio could experience a decline in market value which could adversely affect our financial results.

We held $2.9 billion in short and long-term investments as of March 31, 2008. The investments are invested primarily in investment grade securities, and we limit the amount of investment with any one issuer. A deterioration in the economy, including a credit crisis or significant volatility in interest rates, could cause the investments to decline in value or could impact the liquidity of the portfolio. If market conditions deteriorate significantly, our results of operations or financial condition could be materially adversely affected.

Our business could be materially adversely affected as a result of war or acts of terrorism.

Terrorist acts or acts of war may cause damage or disruption to our employees, facilities, customers, partners, suppliers, distributors and resellers, which could have a material adverse effect on our business, results of operations or financial condition. Such conflicts may also cause damage or disruption to transportation and communication systems and to our ability to manage logistics in such an environment, including receipt of components and distribution of products.

Our business may suffer if we are unable to retain or attract key personnel.

Our business depends to a significant extent on the continued service of senior management and other key employees, the development of additional management personnel and the hiring of new qualified employees. There can be no assurance that we will be successful in retaining existing personnel or recruiting new personnel. The loss of one or more key or other employees, our inability to attract additional qualified employees or the delay in hiring key personnel could have a material adverse effect on our business, results of operations or financial condition.

In addition, we have historically used stock options and other equity awards as key elements of our compensation packages for many of our employees. As a result of the requirement to expense stock-based compensation, we have reduced and may further reduce the number of shares and type of equity awards granted to employees. Additionally, the value of our equity awards may be adversely affected by the volatility of our stock price. Changes to regulatory or stock exchange rules and regulations and in institutional shareholder voting guidelines on equity plans may result in additional requirements or limitations on our equity plans. These factors may impair our ability to attract, retain and motivate employees.

Changes in generally accepted accounting principles may adversely affect us.

From time to time, the FASB promulgates new accounting principles that are applicable to us. The FASB has voted to issue a FASB Staff Position (“FSP”) to change the accounting treatment for convertible debt instruments that require or permit partial cash settlement upon conversion. The proposed accounting change would require issuers to separate the bond into two components: a non-convertible bond and a conversion option. The separation of the conversion option would create a discount in the bond component which would be accreted to its face value through interest expense over the term of the bond. This would increase an issuer’s interest rate commensurate with the issuer’s straight debt rate. If the FSP is approved, we would recognize incremental interest expense on our convertible debt instruments, negatively impacting our diluted earnings per share. In addition, other proposed and new standards or other proposals by the FASB could have a material adverse impact on our results of operations or financial condition.

Our quarterly revenues and earnings could be materially adversely affected by uneven sales patterns and changing purchasing behaviors.

Our quarterly sales have historically reflected an uneven pattern in which a disproportionate percentage of a quarter’s total sales occur in the last month and weeks and days of each quarter. This pattern makes prediction of revenues, earnings and working capital for each financial period especially difficult and uncertain and increases the risk of unanticipated variations in quarterly results and financial condition. We believe this uneven sales pattern is a result of many factors including:

• the relative dollar amount of our product and services offerings in relation to many of our customers’ budgets, resulting in long lead times for customers’ budgetary approval, which tends to be given late in a quarter

• the tendency of customers to wait until late in a quarter to commit to purchase in the hope of obtaining more favorable pricing from one or more competitors seeking their business

• the fourth quarter influence of customers’ spending their remaining capital budget authorization prior to new budget constraints in the first nine months of the following year

• seasonal influences

33

Our uneven sales pattern also makes it extremely difficult to predict near-term demand and adjust manufacturing capacity accordingly. If predicted demand is substantially greater than orders, there will be excess inventory. Alternatively, if orders substantially exceed predicted demand, the ability to assemble, test and ship orders received in the last weeks and days of each quarter may be limited, which could materially adversely affect quarterly revenues and earnings.

In addition, our revenues in any quarter are substantially dependent on orders booked and shipped in that quarter and our backlog at any particular time is not necessarily indicative of future sales levels. This is because:

• we assemble our products on the basis of our forecast of near-term demand and maintain inventory in advance of receipt of firm orders from customers

• we generally ship products shortly after receipt of the order

• customers may reschedule or cancel orders with little or no penalty

Loss of infrastructure, due to factors such as an information systems failure, loss of public utilities or extreme weather conditions, could impact our ability to ship products in a timely manner. Delays in product shipping or an unexpected decline in revenues without a corresponding and timely slowdown in expenses, could intensify the impact of these factors on our business, results of operations and financial condition.

In addition, unanticipated changes in our customers’ purchasing behaviors such as customers taking longer to negotiate and complete their purchases or making smaller, incremental purchases based on their current needs, also make the prediction of revenues, earnings and working capital for each financial period difficult and uncertain and increase the risk of unanticipated variations in our quarterly results and financial condition.

Risks associated with our distribution channels may materially adversely affect our financial results.

In addition to our direct sales force, we have agreements in place with many distributors, systems integrators, resellers and original equipment manufacturers to market and sell our products and services. We may, from time to time, derive a significant percentage of our revenues from such distribution channels. For the quarter ended March 31, 2008, Dell Inc., one of our channel partners, accounted for 12.5% of our revenues. Our financial results could be materially adversely affected if our contracts with channel partners were terminated, if our relationship with channel partners were to deteriorate, if the financial condition of our channel partners were to weaken, if our channel partners are not able to timely and effectively implement their planned actions or if the level of demand for our channel partners’ products and services decreases. In addition, as our market opportunities change, we may have an increased reliance on channel partners, which may negatively impact our gross margins. There can be no assurance that we will be successful in maintaining or expanding these channels. If we are not successful, we may lose sales opportunities, customers and market share. Furthermore, the partial reliance on channel partners may materially reduce the visibility to our management of potential customers and demand for products and services, thereby making it more difficult to accurately forecast such demand. In addition, there can be no assurance that our channel partners will not develop, market or sell products or services or acquire other companies that develop, market or sell products or services in competition with us in the future.

In addition, as we focus on new market opportunities and additional customers through our various distribution channels, including small-to-medium sized businesses, we may be required to provide different levels of service and support than we typically provided in the past. We may have difficulty managing directly or indirectly through our channels these different service and support requirements and may be required to incur substantial costs to provide such services which may adversely affect our business, results of operations or financial condition.

Changes in foreign conditions could impair our international operations.

A substantial portion of our revenues is derived from sales outside the United States. In addition, a substantial portion of our products is manufactured outside of the United States. Accordingly, our future results could be materially adversely affected by a variety of factors, including changes in foreign currency exchange rates, changes in a specific country’s or region’s political or economic conditions, trade restrictions, import or export licensing requirements, the overlap of different tax structures or changes in international tax laws, changes in regulatory requirements, compliance with a variety of foreign laws and regulations and longer payment cycles in certain countries.

34

Undetected problems in our products could directly impair our financial results.

If flaws in design, production, assembly or testing of our products (by us or our suppliers) were to occur, we could experience a rate of failure in our products that would result in substantial repair, replacement or service costs and potential damage to our reputation. Continued improvement in manufacturing capabilities, control of material and manufacturing quality and costs and product testing are critical factors in our future growth. There can be no assurance that our efforts to monitor, develop, modify and implement appropriate test and manufacturing processes for our products will be sufficient to permit us to avoid a rate of failure in our products that results in substantial delays in shipment, significant repair or replacement costs or potential damage to our reputation, any of which could have a material adverse effect on our business, results of operations or financial condition.

Our business could be materially adversely affected as a result of the risks associated with alliances.

We have alliances with leading information technology companies and we plan to continue our strategy of developing key alliances in order to expand our reach into markets. There can be no assurance that we will be successful in our ongoing strategic alliances or that we will be able to find further suitable business relationships as we develop new products and strategies. Any failure to continue or expand such relationships could have a material adverse effect on our business, results of operations or financial condition.

There can be no assurance that companies with which we have strategic alliances, certain of which have substantially greater financial, marketing or technological resources than us, will not develop or market products in competition with us in the future, discontinue their alliances with us or form alliances with our competitors.

Our business may suffer if we cannot protect our intellectual property.

We generally rely upon patent, copyright, trademark and trade secret laws and contract rights in the United States and in other countries to establish and maintain our proprietary rights in our technology and products. However, there can be no assurance that any of our proprietary rights will not be challenged, invalidated or circumvented. In addition, the laws of certain countries do not protect our proprietary rights to the same extent as do the laws of the United States. Therefore, there can be no assurance that we will be able to adequately protect our proprietary technology against unauthorized third-party copying or use, which could adversely affect our competitive position. Further, there can be no assurance that we will be able to obtain licenses to any technology that we may require to conduct our business or that, if obtainable, such technology can be licensed at a reasonable cost.

From time to time, we receive notices from third parties claiming infringement by our products of third-party patent or other intellectual property rights. Responding to any such claim, regardless of its merit, could be time-consuming, result in costly litigation, divert management’s attention and resources and cause us to incur significant expenses. In the event there is a temporary or permanent injunction entered prohibiting us from marketing or selling certain of our products or a successful claim of infringement against us requiring us to pay royalties to a third party, and we fail to develop or license a substitute technology, our business, results of operations or financial condition could be materially adversely affected.

We may become involved in litigation that may materially adversely affect us.

From time to time in the ordinary course of our business, we may become involved in various legal proceedings, including patent, commercial, product liability, employment, class action, whistleblower and other litigation and claims, and governmental and other regulatory investigations and proceedings. Such matters can be time-consuming, divert management’s attention and resources and cause us to incur significant expenses. Furthermore, because litigation is inherently unpredictable, there can be no assurance that the results of any of these actions will not have a material adverse effect on our business, results of operations or financial condition.

We may have exposure to additional income tax liabilities.

As a multinational corporation, we are subject to income taxes in both the United States and various foreign jurisdictions. Our domestic and international tax liabilities are subject to the allocation of revenues and expenses in different jurisdictions and the timing of recognizing revenues and expenses. Additionally, the amount of income taxes paid is subject to our interpretation of applicable tax laws in the jurisdictions in which we file. From time to time, we are subject to income tax audits. While we believe we have complied with all applicable income tax laws, there can be no assurance that a governing tax authority will not have a different interpretation of the law and assess us with additional taxes. Should we be assessed with additional taxes, there could be a material adverse effect on our results of operations or financial condition.

35

Changes in regulations could materially adversely affect us.

Our business, results of operations or financial conditions could be materially adversely affected if laws, regulations or standards relating to us or our products are newly implemented or changed. In addition, our compliance with existing regulations may have a material adverse impact on us. Under applicable federal securities laws, including the Sarbanes-Oxley Act of 2002, we are required to evaluate and determine the effectiveness of our internal control structure and procedures for financial reporting. Should we or our independent auditors determine that we have material weaknesses in our internal controls, our results of operations or financial condition may be materially adversely affected or our stock price may decline.

Our pension and retirement benefit plan assets are subject to market volatility.

We have noncontributory defined benefit pension plans and a post-retirement benefit plan assumed as part of our Data General acquisition. The plans’ assets are invested in common stocks, bonds and cash. The expected long-term rate of return on the plans’ assets for 2008 is 8.25%. The actual long-term rate of return achieved on the plans’ assets for the ten years ended December 31, 2007 was 6.0%. Given current market conditions, should we not achieve the expected rate of return on our plans’ assets or if our plans experience a decline in the fair value of their assets, we may be required to contribute assets to the plan which could materially adversely affect our results of operations or financial condition.

36

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ISSUER PURCHASES OF EQUITY SECURITIES IN THE FIRST QUARTER OF 2008

Period	Total Number of Shares Purchased(1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
January 1, 2008 – January 31, 2008	4,459,474		$	15.93	3,000,000	47,802,691
February 1, 2008 – February 29, 2008	20,703,491		$	15.64	20,581,184	27,221,507
March 1, 2008 – March 31, 2008	12,276,245		$	15.27	12,275,184	14,946,323
Total	37,439,210	(2)	$	15.55	35,856,368	14,946,323

(1) Except as noted in note (2), all shares were purchased in open-market transactions pursuant to a previously announced authorization by our Board of Directors in April 2006 to repurchase 250.0 million shares of our common stock. This repurchase authorization does not have a fixed termination date. In April 2008, our Board of Directors authorized the repurchase of an additional 250.0 million shares of our common stock, increasing the number of shares available for repurchase to 264.9 million shares.

(2) Includes an aggregate of 1,582,842 shares withheld from employees for the payment of taxes.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

Item 5. OTHER INFORMATION

None.

Item 6. EXHIBITS

(a) Exhibits

See index to Exhibits on page 39 of this report.

37

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	EMC CORPORATION
Date: May 9, 2008	By:	/S/ DAVID I. GOULDEN
		David I. Goulden
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)

38

EXHIBIT INDEX

3.1	Restated Articles of Organization of EMC Corporation, as amended. (1)
3.2	Amended and Restated Bylaws of EMC Corporation. (2)
4.1	Form of Stock Certificate. (1)
10.1	Pi Corporation 2003 Stock Plan. (filed herewith)
10.2	Pi Corporation 2006 Stock Plan For Employees of: Pi Corporation Private Limited. (filed herewith)
31.1	Certification of Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
31.2	Certification of Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (filed herewith)
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (filed herewith)

(1) Incorporated by reference to EMC Corporation’s Annual Report on Form 10-K filed February 29, 2008 (No. 001-09853).

(2) Incorporated by reference to EMC Corporation’s Current Report on Form 8-K filed February 4, 2008 (No. 001-09853).

39

EX-10.1

Exhibit 10.1

PI CORPORATION

2003 STOCK PLAN

(as amended and restated effective as of June 20, 2007)

1. Purposes of the Plan. The purposes of this Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees, Directors and Consultants and to promote the success of the Company’s business. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant. Stock Purchase Rights may also be granted under the Plan.

2. Definitions. As used herein, the following definitions shall apply:

(a) “Administrator” means the Board or any of its Committees as shall be administering the Plan in accordance with Section 4 hereof.

(b) “Applicable Laws” means the requirements relating to the administration of stock option plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any other country or jurisdiction where Options or Stock Purchase Rights are granted under the Plan.

(c) “Board” means the Board of Directors of the Company.

(d) “Change in Control” means the occurrence of any of the following events:

(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities; or

(ii) The consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets; or

(iii) The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

(e) “Code” means the Internal Revenue Code of 1986, as amended.

(f) “Committee” means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board in accordance with Section 4 hereof.

(g) “Common Stock” means the Common Stock of the Company.

(h) “Company” means Pi Corporation, a Delaware corporation.

(i) “Consultant” means any person who is engaged by the Company or any Parent or Subsidiary to render consulting or advisory services to such entity.

(j) “Director” means a member of the Board.

(k) “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code.

(1) “Employee” means any person, including officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company.

(m) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(n) “Fair Market Value” means, as of any date, the value of Common Stock determined as follows:

(i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked prices for the Common Stock on the day of determination; or

(iii) In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Administrator.

(o) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.

(p) “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option.

(q) “Option” means a stock option granted pursuant to the Plan.

(r) “Option Agreement” means a written or electronic agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject to the terms and conditions of the Plan.

-2-

(s) “Optioned Stock” means the Common Stock subject to an Option or a Stock Purchase Right.

(t) “Optionee” means the holder of an outstanding Option or Stock Purchase Right granted under the Plan.

(u) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.

(v) “Plan” means this 2003 Stock Plan, as may be amended from time to time.

(w) “Restricted Stock” means Shares issued pursuant to a Stock Purchase Right or Shares of restricted stock issued pursuant to an Option.

(x) “Restricted Stock Purchase Agreement” means a written agreement between the Company and the Optionee evidencing the terms and restrictions applying to Shares purchased under a Stock Purchase Right. The Restricted Stock Purchase Agreement is subject to the terms and conditions of the Plan and the notice of grant.

(y) “Service Provider” means an Employee, Director or Consultant.

(z) “Share” means a share of the Common Stock, as adjusted in accordance with Section 13 below.

(aa) “Stock Purchase Right” means a right to purchase Common Stock pursuant to Section 11 below.

(bb) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.

3. Stock Subject to the Plan. Subject to the provisions of Section 13 of the Plan, the maximum aggregate number of Shares that may be subject to Options or Stock Purchase Rights and sold under the Plan is 1,562,624 Shares. The Shares may be authorized but unissued, or reacquired Common Stock.

If an Option or Stock Purchase Right expires or becomes unexercisable without having been exercised in full, the unpurchased Shares that were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated). However, Shares that have actually been issued under the Plan, upon exercise of either an Option or Stock Purchase Right, shall not be returned to the Plan and shall not become available for future distribution under the Plan, except that if unvested Shares of Restricted Stock are repurchased by the Company at their original purchase price, such Shares shall become available for future grant under the Plan.

4. Administration of the Plan.

(a) Administrator. The Plan shall be administered by the Board or a Committee appointed by the Board, which Committee shall be constituted to comply with Applicable Laws.

-3-

(b) Powers of the Administrator. Subject to the provisions of the Plan and, in the case of a Committee, the specific duties delegated by the Board to such Committee, and subject to the approval of any relevant authorities, the Administrator shall have the authority in its discretion:

(i) to determine the Fair Market Value;

(ii) to select the Service Providers to whom Options and Stock Purchase Rights may from time to time be granted hereunder;

(iii) to determine the number of Shares to be covered by each such award granted hereunder;

(iv) to approve forms of agreement for use under the Plan;

(v) to determine the terms and conditions of any Option or Stock Purchase Right granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Options or Stock Purchase Rights may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Option or Stock Purchase Right or the Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine;

(vi) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws;

(vii) to allow Optionees to satisfy withholding tax obligations by electing to have the Company withhold from the Shares to be issued upon exercise of an Option or Stock Purchase Right that number of Shares having a Fair Market Value equal to the minimum amount required to be withheld. The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined. All elections by Optionees to have Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable; and

(viii) to construe and interpret the terms of the Plan and Options granted pursuant to the Plan.

(c) Effect of Administrator’s Decision. All decisions, determinations and interpretations of the Administrator shall be final and binding on all Optionees.

5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights may be granted to Service Providers. Incentive Stock Options may be granted only to Employees.

6. Limitations.

(a) Incentive Stock Option Limit. Each Option shall be designated in the Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares

-4-

with respect to which Incentive Stock Options are exercisable for the first time by the Optionee during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted.

(b) At-Will Employment. Neither the Plan nor any Option or Stock Purchase Right shall confer upon any Optionee any right with respect to continuing the Optionee’s relationship as a Service Provider with the Company, nor shall it interfere in any way with his or her right or the Company’s right to terminate such relationship at any time, with or without cause, and with or without notice.

7. Term of Plan. Subject to stockholder approval in accordance with Section 19, the Plan shall become effective upon its adoption by the Board. Unless sooner terminated under Section 15, it shall continue in effect for a term of ten (10) years from the later of (i) the effective date of the Plan, or (ii) the earlier of the most recent Board or stockholder approval of an increase in the number of Shares reserved for issuance under the Plan.

8. Term of Option. The term of each Option shall be stated in the Option Agreement; provided, however, that the term shall be no more than ten (10) years from the date of grant thereof. In the case of an Incentive Stock Option granted to an Optionee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Option shall be five (5) years from the date of grant or such shorter term as may be provided in the Option Agreement.

9. Option Exercise Price and Consideration.

(a) Exercise Price. The per share exercise price for the Shares to be issued upon exercise of an Option shall be such price as is determined by the Administrator, but shall be subject to the following:

(i) In the case of an Incentive Stock Option

(A) granted to an Employee who, at the time of grant of such Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant.

(B) granted to any other Employee, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.

(ii) In the case of a Nonstatutory Stock Option, the per Share exercise price shall be determined by the Administrator.

(iii) Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required above pursuant to a merger or other corporate transaction.

-5-

(b) Forms of Consideration. The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant). Such consideration may consist of, without limitation, (i) cash, (ii) check, (iii) promissory note, (iv) other Shares, provided Shares that were acquired directly from the Company (x) have been owned by the Optionee for more than six months on the date of surrender, and (y) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option shall be exercised, (v) consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan, or (vi) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company.

10. Exercise of Option.

(a) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder shall be exercisable according to the terms hereof at such times and under such conditions as determined by the Administrator and set forth in the Option Agreement. An Option may not be exercised for a fraction of a Share.

An Option shall be deemed exercised when the Company receives: (i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Optionee or, if requested by the Optionee, in the name of the Optionee and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 13 of the Plan.

Exercise of an Option in any manner shall result in a decrease in the number of Shares thereafter available for sale under the Option, by the number of Shares as to which the Option is exercised.

(b) Termination of Relationship as a Service Provider. If an Optionee ceases to be a Service Provider, such Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of the Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for three (3) months following the Optionee’s termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

-6-

(c) Disability of Optionee. If an Optionee ceases to be a Service Provider as a result of the Optionee’s Disability, the Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee’s termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

(d) Death of Optionee. If an Optionee dies while a Service Provider, the Option may be exercised within such period of time as is specified in the Option Agreement (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement), by the Optionee’s designated beneficiary, provided such beneficiary has been designated prior to Optionee’s death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Optionee, then such Option may be exercised by the personal representative of the Optionee’s estate or by the person(s) to whom the Option is transferred pursuant to the Optionee’s will or in accordance with the laws of descent and distribution. In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee’s termination. If, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

(e) Leaves of Absence.

(i) Unless the Administrator provides otherwise, vesting of Options granted hereunder shall be suspended during any unpaid leave of absence.

(ii) A Service Provider shall not cease to be an Employee in the case of (A) any leave of absence approved by the Company or (B) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor.

(iii) For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then three (3) months following the 91^st day of such leave, any Incentive Stock Option held by the Optionee shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option.

-7-

11. Stock Purchase Rights.

(a) Rights to Purchase. Stock Purchase Rights may be issued either alone, in addition to, or in tandem with other awards granted under the Plan and/or cash awards made outside of the Plan. After the Administrator determines that it will offer Stock Purchase Rights under the Plan, it shall advise the offeree in writing or electronically of the terms, conditions and restrictions related to the offer, including the number of Shares that such person shall be entitled to purchase, the price to be paid, and the time within which such person must accept such offer. The offer shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator.

(b) Repurchase Option. Unless the Administrator determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company a repurchase option exercisable within 90 days of the voluntary or involuntary termination of the purchaser’s service with the Company for any reason (including death or disability). The purchase price for Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be the original price paid by the purchaser and may be paid by cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall lapse at such rate as the Administrator may determine.

(c) Other Provisions. The Restricted Stock Purchase Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion.

(d) Rights as a Stockholder. Once the Stock Purchase Right is exercised, the purchaser shall have rights equivalent to those of a stockholder and shall be a stockholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment shall be made for a dividend or other right for which the record date is prior to the date the Stock Purchase Right is exercised, except as provided in Section 13 of the Plan.

12. Transferability of Options and Stock Purchase Rights. Unless determined otherwise by the Administrator, Options and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or the laws of descent and distribution, and may be exercised during the lifetime of the Optionee, only by the Optionee.

13. Adjustments; Dissolution or Liquidation: Merger or Change in Control.

(a) Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, shall proportionately adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Option or Stock Purchase Right.

(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Optionee as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Option or Stock Purchase Right will terminate immediately prior to the consummation of such proposed action.

-8-

(c) Merger or Change in Control. In the event of a merger of the Company with or into another corporation, or a Change in Control, each outstanding Option and Stock Purchase Right shall be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation in a merger or Change in Control refuses to assume or substitute for the Option or Stock Purchase Right, then the Optionee shall fully vest in and have the right to exercise the Option or Stock Purchase Right as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested or exercisable. If an Option or Stock Purchase Right becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or Change in Control, the Administrator shall notify the Optionee in writing or electronically that the Option or Stock Purchase Right shall be fully exercisable for a period of fifteen (15) days from the date of such notice, and the Option or Stock Purchase Right shall terminate upon expiration of such period. For the purposes of this paragraph, the Option or Stock Purchase Right shall be considered assumed if, following the merger or Change in Control, the option or right confers the right to purchase or receive, for each Share of Optioned Stock subject to the Option or Stock Purchase Right immediately prior to the merger or Change in Control, the consideration (whether stock, cash, or other securities or property) received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option or Stock Purchase Right, for each Share of Optioned Stock subject to the Option or Stock Purchase Right, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of common stock in the merger or Change in Control.

14. Time of Granting Options and Stock Purchase Rights. The date of grant of an Option or Stock Purchase Right shall, for all purposes, be the date on which the Administrator makes the determination granting such Option or Stock Purchase Right, or such later date as is determined by the Administrator. Notice of the determination shall be given to each Service Provider to whom an Option or Stock Purchase Right is so granted within a reasonable time after the date of such grant.

15. Amendment and Termination of the Plan.

(a) Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan.

(b) Stockholder Approval. The Board shall obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.

(c) Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Optionee, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company. Termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such termination.

-9-

16. Conditions Upon Issuance of Shares.

(a) Legal Compliance. Shares shall not be issued pursuant to the exercise of an Option or Stock Purchase Right unless the exercise of such Option or Stock Purchase Right and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance.

(b) Investment Representations. As a condition to the exercise of an Option or Stock Purchase Right, the Administrator may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.

17. Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

18. Reservation of Shares. The Company, during the term of this Plan, shall at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

19. Stockholder Approval. The Plan shall be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted. Such stockholder approval shall be obtained in the degree and manner required under Applicable Laws.

-10-

ADDENDUM TO THE

PI CORPORATION

2003 STOCK PLAN

For employees of:

PI CORPORATION PRIVATE LIMITED

1. ESTABLISHMENT AND PURPOSE OF ADDENDUM

1.1 ESTABLISHMENT: This Addendum (the “Addendum”) to the Pi Corporation’s 2003 Stock Plan (the ‘Plan”) is hereby established effective as of June 15, 2004. The Addendum shall automatically terminate with the expiry of the Plan or sooner termination thereof as determined by the Administrator.

1.2 PURPOSE: The purpose of this Addendum is to establish certain rules applicable to Options which may be granted under the Plan from time to time to the employees of PI Corporation Private Limited, a wholly-owned subsidiary of the Company, who are residents of the Republic of India, in compliance with the exchange control, securities and other applicable laws currently in force in India. Except as otherwise provided by this Addendum, all Options granted pursuant to this Addendum shall be governed by the terms of the Plan.

2. DEFINITIONS AND CONSTRUCTION

2.1 DEFINITIONS: Except as set forth below, capitalized terms appearing in this Addendum shall have the meanings as assigned to them by the Plan.

(a) “Employee” means an employee of the Indian Subsidiary.

(b) “FEMA” means the Foreign Exchange Management Act, 1999 of India, the rules and regulations notified thereunder and any amendments thereto. The restrictions under FEMA, as referred to in this Addendum and as existing on the effective date of this Addendum, shall be read to include the amendments made to FEMA subsequent to the effective date of this Addendum and will be deemed to have always included such amendments.

(c) “Indian Subsidiary” means Pi Corporation Private Limited for so long as the holding-subsidiary relationship exits between Pi Corporation and Pi Corporation Private Limited, as per the provisions of section 4 of the Indian Companies Act, 1956.

(d) “Option” means a stock option granted pursuant to the Plan and this Addendum.

(e) “Option Agreement” means a written or electronic agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject to the terms of the Plan and this Addendum.

(f) “Optionee” means the holder of an outstanding Option or Stock Purchase Right granted under the Plan and this Addendum.

(g) “Promoter” means the person or persons who are in over-all control of the Company, who are instrumental in the formation of the Company or program pursuant to which the shares were offered to the public, or the person or persons named in the offer document as promoter(s). Provided that a director or officer of the Company, if he is acting as such only in his professional capacity will not be deemed to be a promoter. Where a promoter of the Company is a body corporate, the promoters of that body corporate shall also be deemed to be promoters of the Company.

(h) “Promoter Group” means an immediate relative of the Promoter (i.e. spouse of that person, or any parent, brother, sister or child of the person or of the spouse), persons whose shareholding is aggregated for the purpose of disclosing in the offer document “shareholding of the promoter group”.

(i) “Stock Purchase Right” means a right to purchase Common Stock pursuant to the Plan and this Addendum.

2.2 CONSTRUCTION: Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Addendum. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

3. ADOPTION BY THE INDIAN SUBSIDIARY

This Addendum shall be extended to the Employees only if the board of directors of the Indian Subsidiary adopts the Plan and Addendum for its extension to the employees of the Indian Subsidiary. The Indian Subsidiary, in so far as the terms and conditions of the Plan read together with this Addendum apply to it, shall be bound by the terms and conditions thereof, including (but not limited to) the provisions granting exclusive authority to the Administrator to administer and interpret the Plan.

4. STOCK SUBJECT TO ADDENDUM

Subject to the provisions of Section 3 of the Plan, the maximum aggregate number of Shares, which may be subject to option and sold under this Addendum is 210,000 Shares, reduced by the aggregate number of Shares subject to option or right to purchase stock and sold under the Plan but not pursuant to this Addendum. The Shares may be authorized, but unissued, or reacquired Common Stock.

If an Option or Stock Purchase Right expires or becomes unexercisable without having been exercised in full, or is surrendered, the unpurchased Shares which were subject thereto shall become available for future grant or sale under this Addendum (unless the Addendum has terminated). However, Shares that have actually been issued under this Addendum shall not be returned to the Addendum and shall not become available for future distribution under this Addendum.

5. ADMINISTRATION

This Addendum will be administered by the Administrator. No Options or Stock Purchase Rights will be granted or issued to any Employee, unless such Options or Stock Purchase Rights are approved by the Administrator. Subject to the provisions of the Plan and this

-2-

Addendum, the Administrator, shall, in its discretion, determine the persons to whom Options or Stock Purchase Rights will be granted under this Addendum and all of the terms and conditions of such Options or Stock Purchase Rights. The Administrator will have the full authority to make all determinations called for under this Addendum and to interpret the Addendum and each Option or Stock Purchase Right. All such determinations shall be final and binding on all persons having an interest in the Addendum or any Option or Stock Purchase Right. The Administrator may terminate or amend the Plan or this Addendum at any time in accordance with Section 15 of the Plan.

6. ELIGIBILITY

Options or Stock Purchase Rights may be granted under this Addendum only to persons who are Employees “resident” in India in accordance with the provisions of FEMA, excluding, however, any Employee who is a Promoter or belongs to the Promoter Group or who is a Director who either by himself or through his relative or through any body corporate, directly or indirectly, holds more than ten percent (10%) of the outstanding equity shares of the Company. Eligibility in accordance with this Section shall not entitle any person to be granted an Option or Stock Purchase Right, or, having been granted an Option, to be granted an additional Option or Stock Purchase Right. The Administrator shall, based on the performance, potential for future contribution to the Company, integrity, number of employment years and any other factor(s) as deemed fit by the Administrator in its discretion, form the basis for determining the quantum for awarding the Options or Stock Purchase Rights, if any. The number of Shares subject to Options or Stock Purchase Rights that may be granted under the Plan to an Employee shall not be more than 210,000 Shares.

7. TERMS AND CONDITIONS OF OPTIONS

Each Option shall be evidenced by an Option Agreement in the form approved by the Administrator; provided, however, that each Option Agreement shall comply with the terms specified below and, to the extent not inconsistent with such terms, with the terms specified by the Plan.

7.1 VESTING: Subject to the Plan and the Option Agreement, Options shall become exerciseable upon such schedule as approved by the Administrator.

7.2 EXERCISE: An Option may not be exercised for a fraction of a Share. An Option shall be deemed exercised when the Company receives (i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised.

7.3 EXERCISE PRICE: The exercise price for each Option shall be established at the discretion of the Administrator based on Fair Market Value on the date of grant of the Option in accordance with the terms of the Plan.

7.4 RIGHT TO EXERCISE OF OPTIONS AND EFFECT OF TERMINATION OF SERVICE: Subject to the provisions of the Plan, if an Optionee ceases to be an Employee upon termination of his service, the Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement).

-3-

For the purposes of each Option granted pursuant to this Addendum, “termination of service” or words of similar meaning shall mean the time of occurrence of any of the following, whichever is the first to occur:

(a) the death of the Optionee, provided that the Optionee’s service has not otherwise previously terminated;

(b) the termination of any minimum statutory notice period to which the Optionee is entitled pursuant to applicable employment laws, unless the Company employing the Optionee, in its discretion, designates a later time of termination of service;

(c) the Indian Subsidiary ceases to be a Subsidiary of the Company; or

(d) in all other cases, the time of the cessation of the Optionee’s active service as determined by the Company or the Indian Subsidiary, in its discretion;

provided, however, that it is expressly intended that “termination of service” for all purposes of any such Option shall not mean and shall not be construed to mean the time of expiration of any period of reasonable notice that the Indian Subsidiary or the Company may be required by law to provide to the Optionee. Subject to the foregoing, the Company, in its discretion, shall determine whether the Optionee’s service has terminated and the effective date of such termination of service.

7.5 PAYMENT OF EXERCISE PRICE: Payment of the exercise price for the number of Shares being purchased pursuant to any Option shall be made only by one of the following:

(a) Except as otherwise provided below, payment of the exercise price for the number of Shares being purchased pursuant to any Option shall be made (i) in cash, by check or cash equivalent, (ii) pursuant to a cashless exercise program implemented by the Company in connection with the Plan, (iii) by such other consideration as may be approved by the Administrator from time to time to the extent permitted by Applicable Law, or (iv) by any combination thereof. Notwithstanding the foregoing, the above procedures will be subject to compliance with the applicable regulations under FEMA.

The Administrator may at any time or from time to time, by approval of or by amendment to the standard forms of Option Agreement or by other means, grant Options which do not permit all of the foregoing forms of consideration to be used in payment of the exercise price or which otherwise restrict one or more forms of consideration.

7.6 TAX WITHHOLDING: The Company shall have the right, to deduct from the shares of Common Stock issuable upon the exercise of an Option, or to accept from the Optionee the tender of, a number of whole shares of Common Stock having a Fair Market Value, as determined by the Company, equal to all or any part of the taxes, if any, required by law to be withheld by the Company or the Indian Subsidiary with respect to such Option or the Shares acquired upon the exercise thereof. Alternatively or in addition, in its discretion, the Company or the Indian Subsidiary shall have the right to require the

-4-

Optionee, through payroll withholding, cash payment or otherwise, including by means of a Cashless Exercise, to make adequate provision for any such tax withholding obligations of the Company or the Indian Subsidiary arising in connection with the Option or the shares acquired upon the exercise thereof. The Fair Market Value of any shares of Common Stock withheld or tendered to satisfy any such tax withholding obligations shall not exceed the amount determined by the applicable minimum statutory withholding rates. The Company shall have no obligation to deliver shares of Common Stock until such tax withholding obligations have been satisfied by the Optionee.

7.7 CURRENCY EXCHANGE RATES: Except as otherwise determined by the Administrator, all monetary values under this Addendum, including, without limitation, the Fair Market Value per Share and the exercise price of each Option shall be stated in US Dollars. Any changes or fluctuations in the exchange rate at which amounts paid by Optionees in currencies other than US Dollars are converted into US Dollars or amounts paid to Optionees in US Dollars are converted into currencies other than US Dollars shall be borne solely by the Optionee.

7.8 NON-TRANSFERABILITY OF OPTIONS: The Options and Stock purchase Rights may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee.

8. STOCK PURCHASE RIGHTS

The issue of Stock Purchase Rights to Employees shall be governed by the provisions of Section 11 of the Plan, provided they do not conflict with this Addendum, and the FEMA.

9. COMPLIANCE WITH LAW

In addition to the requirements set forth in the Plan, the grant of Options pursuant to this Addendum and the issuance of Shares upon exercise of such Options shall be subject to compliance with all applicable requirements of the law of the Republic of India.

-5-

PLAN ADOPTION AND AMENDMENTS

Effective Date of Adoption/ Amendment	Section	Effect of Amendment
October 14, 2003	—	Adoption of Plan; 210,000 Shares reserved for issuance under Section 3 of the Plan.
June 15, 2004	Addendum	Adoption of India Addendum to the Plan.
November 19, 2004	3	Aggregate number of shares reserved for issuance under the Plan increased from 210,000 to 438,000 shares.
	—	Plan restated in its entirety.
December 12, 2005	3	Aggregate number of shares reserved for issuance under the Plan increased from 438,000 to 1,081,266 shares.
	—	Plan restated in its entirety.
June 29, 2006	3	Aggregate number of shares reserved for issuance under the Plan increased from 1,081,266 to 1,226,610 shares.
	—	Plan restated in its entirety.
June 20, 2007	3	Aggregate number of shares reserved for issuance under the Plan increased from 1,226,610 to 1,562,624 shares.
	13(a)	The words “may (in its sole discretion)” replaced with the words “shall proportionately.”
	—	Plan restated in its entirety.

EX-10.2

Exhibit 10.2

PI CORPORATION

2006 STOCK PLAN

For Employees of:

PI CORPORATION PRIVATE LIMITED

1. Establishment and Purpose of the Plan.

1.1 Establishment. This 2006 Stock Plan (the “Plan”) is hereby established effective as of December 30, 2006.

1.2 Purpose. The purpose of this Plan is to establish certain rules applicable to Options which may be granted under the Plan from time to time to the employees of Pi Corporation Private Limited, a wholly-owned subsidiary of Pi Corporation, a Delaware corporation (the “Company”), who are residents of the Republic of India, in compliance with the FEMA, securities and other applicable laws currently in force in India.

2. Definitions and Construction.

2.1 As used herein, the following definitions shall apply:

(a) “Administrator” means the Board or any of its Committees as shall be administering the Plan in accordance with Section 4 hereof.

(b) “Applicable Laws” means the requirements relating to the administration of stock option plans under U.S. state corporate laws, U.S. federal and state securities laws, the laws of India, including, without limitation, FEMA, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any other country or jurisdiction where Options are granted under the Plan.

(c) “Board” means the Board of Directors of the Company.

(d) “Change in Control” means the occurrence of any of the following events:

(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities; or

(ii) The consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets; or

(iii) The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the

surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

(e) “Code” means the Internal Revenue Code of 1986, as amended.

(f) “Committee” means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board in accordance with Section 4 hereof.

(g) “Common Stock” means the Common Stock of the Company.

(h) “Company” means Pi Corporation, a Delaware corporation.

(i) “Director” means a member of the Board.

(j) “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code.

(k) “Employee” means a permanent employee or a director (whether whole time or not) of the Indian Subsidiary.

(1) “Fair Market Value” means, as of any date, the value of Common Stock determined as follows:

(i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked prices for the Common Stock on the day of determination; or

(iii) In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Administrator, based upon the Company’s accounts for the previous three financial years, current book value per share of the Company’s outstanding capital stock, the price at which shares of the Company’s outstanding capital stock have previously been issued by the Company, the liquidation rights and other preferences to which the holders of those shares are entitled, the lack of marketability of the Shares, the nature of the Company and its business prospectus and other factors.

(m) “FEMA” means the Foreign Exchange Management Act, 1999 of India, the rules and regulations notified thereunder and any amendments thereto. The restrictions under FEMA, as referred to in this Plan and as existing on the effective date of this Plan, shall be read to include the amendments made to FEMA subsequent to the effective date of this Plan and will be deemed to have always included such amendments.

(n) “Indian Subsidiary” means Pi Corporation Private Limited, for so long as the holding-subsidiary relationship exists between Pi Corporation and Pi Corporation Private Limited, as per the provisions of section 4 of the Indian Companies Act, 1956.

(o) “Option” means a stock option granted pursuant to the Plan.

(p) “Option Agreement” means a written or electronic agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject to the terms of the Plan.

(q) “Optionee” means the holder of an outstanding Option granted under the Plan.

(r) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.

(s) “Plan” means this 2006 Stock Plan.

(t) “Promoter” means the person or persons who are in overall control of the Company, who are instrumental in the formation of the Company or program pursuant to which the Shares were offered to the public, or the person or persons named in the offer document as promoter(s), provided that a director or officer of the Company, if he is acting as such only in his professional capacity will not be deemed to be a Promoter. Where a promoter of the Company is a body corporate, the promoters of that body corporate shall also be deemed to be promoters of the Company.

(u) “Promoter Group” means an immediate relative of the Promoter (i.e. spouse of that person, or any parent, brother, sister or child of the person or of the spouse), persons whose shareholding is aggregated for the purpose of disclosing in the offer document “shareholding of the promoter group”.

(v) “Share” means a share of the Common Stock, as adjusted in accordance with Section 17 below.

(w) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.

2.2 Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

3. Adoption by the Indian Subsidiary. The Plan shall apply to the Employees only if the board of directors of the Indian Subsidiary adopts the Plan for its applicability to the Employees. The Indian Subsidiary shall be bound by the terms and conditions of the Plan, including (but not limited to) the provision granting exclusive authority to the Administrator to administer and interpret the Plan.

4. Stock Subject to the Plan. Subject to the provisions of Section 17 below, the maximum aggregate number of Shares, which may be subject to option and sold under this Plan is 210,000 Shares. The Shares may be authorized, but unissued, or reacquired Common Stock.

If an Option expires or becomes unexercisable without having been exercised in full, or is surrendered, the unpurchased Shares which were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated). However, Shares that have actually been issued under the Plan shall not be returned to the Plan and shall not become available for future distribution under the Plan.

5. Administration of the Plan. The Plan will be administered by the Administrator. No Options will be granted or issued to any Employee, unless such Options are approved by the Administrator. Subject to the provisions of the Plan, the Administrator, shall, in its discretion, determine the persons to whom Options will be granted under the Plan and all of the terms and conditions of such Options. The Administrator will have the full authority to make all determinations called for under the Plan and to interpret the Plan and each Option. All such determinations shall be final and binding on all persons having an interest in the Plan or any Option. The Administrator may terminate or suspend the Plan at any time in accordance with Section 19 below. All determinations, interpretations and constructions made by the Administrator shall not be subject to review by any person and shall be final, binding and conclusive on all persons.

6. Eligibility. Options may be granted under the Plan only to persons who are Employees “resident” in India in accordance with the provisions of FEMA, excluding, however, any Employee who is a Promoter or belongs to the Promoter Group or who is a director who either by himself or through his relative or through any body corporate, directly or indirectly, holds more than ten percent (10%) of the outstanding equity shares of the Company. Eligibility in accordance with this Section shall not entitle any person to be granted an Option, or, having been granted an Option, to be granted an additional Option. The Administrator shall, based on the performance, potential for future contribution to the Indian Subsidiary, integrity, number of employment years and any other factor(s) as deemed fit by the Administrator in its discretion, form the basis for determining the quantum for awarding the Options, if any. No Employee shall be granted aggregate Options under the Plan less than 100 Shares or greater than 210,000 Shares.

7. Continued Employment. Neither the Plan nor any Option shall confer upon any Optionee any right with respect to continuing the Optionee’s relationship as an Employee with the Indian Subsidiary, nor shall it interfere in any way with his or her right or the Indian Subsidiary’s right to terminate such relationship at any time.

8. Term of Plan. Subject to stockholder approval in accordance with Section 23, the Plan shall become effective upon its adoption by the Board. Unless sooner terminated under Section 19, it shall continue in effect for a term of ten (10) years from the effective date of the Plan.

9. Term of Option. The term of each Option shall be stated in the Option Agreement; provided, however, that the term shall be no more than ten (10) years from the date of grant thereof.

10. Vesting. Subject to the Plan and the Option Agreement, Options shall vest and become exerciseable at such time or times and/or upon such vesting criteria as the Administrator may determine.

11. Option Exercise Price and Consideration.

11.1 Exercise Price. The exercise price for each Option shall be established at the discretion of the Administrator based on Fair Market Value on the date of grant of the Option in accordance with the terms of the Plan, provided however that the exercise price of each Option shall be not less than one hundred percent (100%) of the Fair Market Value on the date the Option is granted.

11.2 Basis of Valuation of the Shares. The Administrator shall determine the Fair Market Value of the Shares as per the terms of the Plan. In the absence of an established market for the Common Stock, the Fair Market Value of the Shares will be determined by the Administrator, which is based on the factors as set forth on Exhibit A to this Plan.

11.3 Forms of Consideration. The Administrator will determine the acceptable form of consideration for exercising an Option, including the method of payment. Such consideration may consist entirely of: (i) cash, check, or cash equivalent, (ii) consideration received pursuant to a cashless exercise program implemented by the Company in connection with the Plan, (iii) such other consideration as may be approved by the Administrator from time to time to the extent permitted by Applicable Law, or (iv) by any combination thereof. Notwithstanding the foregoing sentence, the above forms of consideration will be subject to compliance with the applicable regulations under FEMA.

12. Restrictions on Transferability of Shares. The transferability of Shares acquired pursuant to an Option shall be restricted, as the Administrator deems appropriate in its sole discretion from time to time, including, without limitation, (i) right to repurchase upon termination of the employment relationship, (ii) right of first refusal, (iii) right to transfer to certain persons and/or entities and (iv) market lock-up provisions, if any.

13. Exercise of Option.

13.1 Procedure for Exercise; Rights as a Stockholder. An Option may not be exercised for a fraction of a Share. An Option shall be deemed exercised when the Company receives (i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised (together with applicable tax withholding). Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Optionee or, if requested by the Optionee, in the name of the Optionee and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry in the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to

the Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 17 of the Plan. Exercise of an Option in any manner shall result in a decrease in the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

13.2 Termination of Relationship as an Employee. If an Optionee ceases to be an Employee, other than upon the Optionee’s death or Disability, such Optionee may exercise his or her Option within such period of time as specified in the Option Agreement, to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of the Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for three (3) months following the Optionee’s termination. Unless the Administrator provides otherwise, if on the date of termination the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan.

13.3 Disability of Optionee. If an Optionee ceases to be an Employee as a result of the Optionee’s Disability, the Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee’s termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

13.4 Death of Optionee. If an Optionee dies while an Employee, the Option may be exercised within such period of time as is specified in the Option Agreement (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement), by the Optionee’s designated beneficiary, provided such beneficiary has been designated prior to Optionee’s death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Optionee, then such Option may be exercised by the personal representative of the Optionee’s estate or by the person(s) to whom the Option is transferred pursuant to the Optionee’s will or in accordance with the laws of descent and distribution. In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee’s termination. If, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

13.5 Leave of Absence.

(a) Unless the Administrator provides otherwise, vesting of Options granted hereunder shall be suspended during any unpaid leave of absence.

(b) An Employee shall not, at the sole discretion of the Administrator, cease to be an Employee in the case of (A) any leave of absence approved by the Company or (B) transfers between locations of the Indian Subsidiary or between the Indian Subsidiary, Company, its Parent, any other Subsidiary, or any successor.

14. Tax Withholding. The Company shall have the right to deduct from the shares of Common Stock issuable upon the exercise of an Option, or to accept from the Optionee the tender of, a number of whole shares of Common Stock having a Fair Market Value, as determined by the Company, equal to all or any part of the taxes, if any, required by Applicable Law to be withheld by the Company or the Indian Subsidiary with respect to such Option or the Shares acquired upon the exercise thereof. Alternatively or in addition, in its discretion, the Company or the Indian Subsidiary shall have the right to require the Optionee, through payroll withholding, cash payment or otherwise, including by means of a cashless exercise, to make adequate provision for any such tax withholding obligations of the Company or the Indian Subsidiary arising in connection with the Option or the Shares acquired upon the exercise thereof. The Fair Market Value of any shares of Common Stock withheld or tendered to satisfy any such tax withholding obligations shall not exceed the amount determined by the applicable minimum statutory withholding rates. The Company shall have no obligation to deliver shares of Common Stock until such tax withholding obligations have been satisfied by the Optionee.

15. Currency Exchange Rates. Except as otherwise determined by the Administrator, all monetary values under the Plan, including, without limitation, the Fair Market Value per Share and the exercise price of each Option shall be stated in US Dollars. Any changes or fluctuations in the exchange rate at which amounts paid by Optionees in currencies other than US Dollars are converted into US Dollars or amounts paid to Optionees in US Dollars are converted into currencies other than US Dollars shall be borne solely by the Optionee.

16. Non-Transferability of Options. The Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee.

17. Adjustments; Dissolution or Liquidation; Merger or Change in Control.

17.1 Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, may (in its sole discretion) adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Option.

17.2 Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Optionee as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Option will terminate immediately prior to the consummation of such proposed action.

17.3 Merger or Change in Control. In the event of a merger of the Company with or into another corporation, or a Change in Control, each outstanding Option shall be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation in a merger or Change in Control refuses to assume or substitute for the Option, then the Optionee shall fully vest in and have the right to exercise the Option as to all of the Shares subject to the Option, including Shares as to which it would not otherwise be vested or exercisable. If an Option is not assumed or substituted for in the event of a merger or Change in Control, the Administrator shall notify the Optionee in writing or electronically that the Option shall be fully exercisable for a period of time as determined by the Administrator, and the Option shall terminate upon expiration of such period. For the purposes of this paragraph, the Option shall be considered assumed if, following the merger or Change in Control, the option or right confers the right to purchase or receive, for each Share subject to the Option immediately prior to the merger or Change in Control, the consideration (whether stock, cash, or other securities or property) received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option, for each Share subject to the Option, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of common stock in the merger or Change in Control.

18. Time of Granting Options. The date of grant of an Option shall, for all purposes, be the date on which the Administrator makes the determination granting such Option, or such later date as is determined by the Administrator. Notice of the determination shall be given to each Employee to whom an Option is so granted within a reasonable time after the date of such grant.

19. Suspension and Termination of the Plan.

19.1 Termination. The Administrator may, in its discretion, suspend or terminate the Plan at any time, without any obligations on the Company as a result of such suspension or termination.

19.2 Stockholder Approval. The Administrator shall obtain stockholder approval with respect to the Plan (or any amendment thereto) to the extent necessary and desirable to comply with Applicable Laws.

19.3 Effect of Amendment or Termination. No suspension or termination of the Plan shall impair the rights of any Optionee, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company. Termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such termination.

20. Conditions Upon Issuance of Shares.

20.1 Legal Compliance. Shares shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance.

20.2 Investment Representations. As a condition to the exercise of an Option, the Administrator may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.

21. Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

22. Reservation of Shares. The Company, during the term of this Plan, shall at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

23. Stockholder Approval. The Plan shall be subject to approval by the stockholders of the Company within twelve (12) months from the date it is adopted by the Board. Such stockholder approval shall be obtained by way of a general meeting or unanimous consent, as may be permissible under Applicable Laws.

24. Choice of Law. The law of the State of Washington shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such state’s conflict of laws rules.

EXHIBIT A

Basis of Valuation of Common Stock of Pi Corporation

The basis of valuation of Pi Corporation’s shares is determined by the Board of Directors of Pi Corporation immediately prior to the grant of each stock option. The Board of Directors determined on November 9, 2006 that the fair market value of one share was US$0.35, as of such date. The Board determines the valuation of the shares based on various factors, including but not limited to:

1. The value of the Company’s tangible and intangible assets;

2. Projections of future cash flows;

3. Comparisons to valuations of comparable public companies using various financial methodologies;

4. The liquidation rights and other preferences that have been granted to purchasers of the Company’s Preferred Stock;

5. The lack of marketability of the Common Stock;

6. The start-up nature of the Company;

7. Current financial condition;

8. Business outlook;

9. Status of product development efforts; and

10. The fact that the Board does not expect there to be a change of control or an initial public offering during the 12-month period following the date on which the Board determined the fair market value.

For and on behalf of Pi Corporation:

Paul Maritz, Director

Cary Davis, Director

EX-31.1

Exhibit 31.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION

I, Joseph M. Tucci, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of EMC Corporation (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: May 9, 2008	/S/ JOSEPH M. TUCCI
	Joseph M. Tucci
	Chairman, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

PRINCIPAL FINANCIAL OFFICER CERTIFICATION

I, David I. Goulden, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of EMC Corporation (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: May 9, 2008	/S/ DAVID I. GOULDEN
	David I. Goulden
	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Joseph M. Tucci, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Quarterly Report on Form 10-Q of EMC Corporation for the quarter ended March 31, 2008, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of EMC Corporation.

/S/ JOSEPH M. TUCCI

Joseph M. Tucci

Chairman, President and Chief Executive Officer

May 9, 2008

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section. This certification shall not be deemed incorporated by reference in any filing under the Securities Act or Exchange Act, except to the extent that the Company specifically incorporates it by reference.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, David I. Goulden, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Quarterly Report on Form 10-Q of EMC Corporation for the quarter ended March 31, 2008, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of EMC Corporation.

/S/ DAVID I. GOULDEN

David I. Goulden

Executive Vice President and Chief Financial Officer

May 9, 2008

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section. This certification shall not be deemed incorporated by reference in any filing under the Securities Act or Exchange Act, except to the extent that the Company specifically incorporates it by reference.