EMC Buys Legato

The storage giant will acquire backup software player Legato Systems for approximately $1.3 billion in stock.

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Storage giant EMC Corp. today announced its acquisition of backup software player Legato Systems Inc. for approximately $1.3 billion in stock.

EMC, of Hopkinton, Mass., has bought nine smaller companies since beginning its software blitz in early 2000. Larger deals were for Conley Corp., of an undisclosed sum in 1998; Softworks Inc. for $192 million in December 1999; Data General Corp. for $1.1 billion in 2000; CrosStor Software Inc. for $300 million in 2000; and Terascape Software Inc. for $50 million, also in 2000.

In todays deal, adjacent to EMCs current software vision, "What were really looking at is to get this innovative technology and a time-to-market benefit," EMC CEO and President Joe Tucci said. Legato Chairman and CEO David Wright will become the division president, Tucci said. EMC will announce the technology strategy Aug. 6 at its annual Analysts Day in New York, he said.

Legato, of Mountain View, Calif., which has about 31,000 customers worldwide, has long been for sale. EMC and Hewlett-Packard Co. were among the early shoppers.

EMC has at least one other major deal forthcoming, Tucci said. But "if I mention the segment, youre going to think of one or two players and Ill be working against myself," he said.

Legatos main rivals are Veritas Software Corp, also in Mountain View, and IBMs Tivoli division, in Houston. Of the market effect, "clearly the acquisition of Legato is going to propel us faster into being competitors" to Veritas especially, Tucci noted. However, Veritas long-term plan expands well beyond storage and so "Veritas and EMC are much more a competitor in vision than we are in reality," he added.