In a presentation with financial analysts on Tuesday, Joe Tucci, chairman, CEO and president of EMC, listed "opportunistic" mergers and acquisitions as a key focus for the company to improve its competitiveness during the current economic downturn. With US$9 billion in cash, EMC would likely be able to do acquisitions without drawing on outside financing.

With large cash reserves on hand and acquisition prices driven lower by the economic downturn, EMC is looking to buy companies that will make it stronger.

"At this point in time, my No. 1 target would be a company that's in a business that's very similar to ours, not an adjacent market," Tucci said in an interview. "I don't think it's a great time to enter an adjacent market. I think it's a great time to get stronger."

Among the factors that would make an acquisition attractive to EMC are the ability to bring in good people, obtain new technology, or to gain access to the company's customers.

Possible acquisition targets include "companies that would make our virtual infrastructure strategy stronger, that would make our information infrastructure strategy stronger," Tucci said.

Improving EMC's technology and product line is a priority for EMC in the current climate, but Tucci said EMC saw no need to increase it's spending on research and development to more than 12 percent of the company's 2009 revenue. EMC spent the same percentage of its annual revenue on research and development during 2008 and 2007.

Twelve percent of revenue is "still a very big commitment," Tucci said.

To put that into perspective, EMC spent $1.7 billion on research and development during 2008, when the company earned revenue of $14.9 billion.

"That's where we're comfortable, 12 percent of revenue, and you refocus where you're going to spend. In the areas that are of massive importance to us, most of those budgets got increased," he said.