EMC Pushes SoftwareHard
EMCs transformation into a semi-software company is gaining momentum, judging from its moves over the past week. The company been on a tear over the past few years, acquiring a range of software companies to bolster its home-grown development efforts. However, analysts advised that before a company can build strong bones and a software strategy, it must chew and digest its meals.
Last week, EMC made a $1.3 billion deal for backup software developer Legato Systems of Mountain View, Calif. EMC executives said the company will run the acquisition as part of a separate software division. (See "Will EMC Treat Legato Customers Right?" for more information.)
Legato is only the latest of EMCs technology purchases, albeit one of the most expensive; the company has cut upward of a dozen deals since 2000. Heres a rundown of the deals EMC has made just over the past 12 months:
Earlier this month, while folks were heading out for the Independence Day weekend, EMC and BMC Software Inc. announced a "strategic global software partnership," covering BMCs Storage Manager software. The companies will migrate current BMC customers to EMCs ControlCenter package.
In April, EMC acquired Astrum Software of Boston. The company makes "active storage management" software, which lets administrators monitor various popular database applications and then apply policies for their storage and availability.
Finally, EMC in late September bought Prisa Networks of San Diego. Its the developer of VisualSAN, a management tool for heterogeneous SANs connected with Fibre Channel, InfiniBand and Gigabit Ethernet. (See "EMC Buys Software Maker Prisa" for more information.)
Can EMC, or any company, bring enough focus to bear on its strategies, market and customers, while integrating all of these companies?
"It will all come down to execution," said Vice President Ray Paquet of analyst firm Gartner Inc. "EMC cant focus on all of them [the software acquisitions] at once."
EMCs stated goal is to become increasingly a software company. The company has said it wants to raise its software efforts to account for 30 percent of its revenues. However, to execute this strategy, EMC must stitch together a wide range of software programs, some with overlapping technologies and feature sets. At the same time, it must also merge the engineering teams from an growing assortment of companies.
Such a transition "would be a challenge for any company," according to Fred Broussard, senior research analyst with International Data Corp. He said it was easy to talk the talk about these assemblages but more difficult to work out the details. "The digestion [of the companies and technologies] is still taking place."
Broussard added that this integration could be slowed by resistance within EMCs hardware-centric culture. After all, he observed, even after software achieves a 30 percent share of revenues, the lions share of sales will still come from volume hardware shipments.
Of course, there are two phases to executing a strategy: First comes determining it, and then comes execution. The big question is: Where does EMCs shopping spree fit into this timelinein the preparation or the execution phase?
According to EMC President and CEO Joe Tucci, the company is still on the hunt for yet another major software acquisition. He wouldnt provide any details.
Its a good bet that either way, the clock is still ticking.
David Morgenstern is a longtime reporter of the storage industry as well as a veteran of the dotcom boom in the storage-rich fields of professional content creation and digital video.