Storage specialist EMC (NYSE: EMC) started out 2011 in fine fashion, shares easily beating the S&P 500 benchmark and all-comer rivals from NetApp (Nasdaq: NTAP) to Quantum (NYSE: QTM). The second half of the quarter was a very different story as EMC barely nudged out the broader market and trailed suddenly red-hot Quantum by a wide margin.

Some of that unimpressive performance stems from the highly publicized security incidents this spring in which large customers, including defense contractor Lockheed Martin (NYSE: LMT), were hacked and their EMC-backed RSA Security login information compromised. Investors rightly feared that the fallout from this incident might be costly: EMC had to replace tons of security hardware, harden its own systems, and reassure customers that it wouldn't happen again.

As it turns out, the actual damage from that incident wasn't all that bad. In the just-published second-quarter report, EMC said that the RSA division saw 13% higher sales year-over-year. That's slower than the 20% growth rate for the whole company but still far from the total implosion you'd see if RSA couldn't be trusted anymore. In fact, RSA's growth accelerated from the 8% year-over-year boost seen in the previous quarter.

On the earnings call, CEO Joe Tucci explained that EMC's quick response to the situation along with customer education on better security practices went a long way toward keeping clients around.

A $66 million "special charge" in the second quarter for the RSA situation caused a $0.02 hit to earnings per share, which landed at $0.35 per share in non-GAAP terms, or 25% above the year-ago quarter.

With that distraction now receding in the rearview mirror, EMC can refocus on the core storage business.

Or perhaps the company will go after one of the many merger opportunities that have been bandied about recently. Storage-starved tech titans Oracle (Nasdaq: ORCL) and Cisco Systems (Nasdaq: CSCO) have both been named as potential EMC buyers; in one fell swoop, those big boys could gain a market-leading storage expert and the virtual computing wizardry of majority-owned VMware (NYSE: VMW).

After accounting for its valuable VMware stake, EMC remains a value-priced technology stock with high-quality management and exposure to at least two huge trends in Big Data and cloud computing. Fellow Fool Eric Bleeker saw it as one of the top tech stocks for 2011, and he hasn't exactly been wrong so far. Will the second half look even brighter? The best way to find out is to add EMC to your Foolish watchlist. With a steady stream of Foolish news and analysis at your fingertips, you'll be able to tell where the stock is going before it's too late to invest in the news. Just click here to get started.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. The Motley Fool owns shares of Oracle, Lockheed Martin, and EMC. The Fool also owns shares of and has created a bull call spread position on Cisco Systems. Motley Fool newsletter services have recommended buying shares of Cisco and VMware. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio, follow him on Twitter or Google+, or peruse our Foolish disclosure policy.