EMC Acknowledges Role in Startup

EMC confirms that it sold its Israel-based research and development subsidiary to Diligent Technologies.

Officials at enterprise storage leader EMC Corp. acknowledged the companys role in startup Diligent Technologies Corp. for the first time today, saying EMC sold its Israel-based research and development subsidiary to Diligent in September.

The sale gives Diligent ownership of EMCs CopyCross software, which is designed to make disk systems appear as virtual tape systems to mainframes.

EMC decided to sell the R&D group because "the work going on in it was entirely focused on mainframe-based data only, and it did not align with our open-software strategy," according to EMC spokesman Greg Eden. "We will sell and support [CopyCross] through a reseller agreement with Diligent."

Currently, CopyCross only works with EMCs own Symmetrix storage products, but under Diligents control, the tool may be expanded to support other disk systems, sources said.

EMC officials also confirmed today that Diligent will be majority owned by two former EMC employees: Doron Kempel, a former EMC vice president once sued by EMC for breaking a non-compete contract, and Moshe Yanai, an engineer who pioneered EMCs flagship Symmetrix product, Eden said.

Diligent, to be headquartered in Framingham, Mass., is expected to launch later this year. It is to be largely comprised of Tel Aviv, Israel-based engineers working on tape virtualization, next-generation data recovery, and data management products, sources close to the company have said.

Word of the involvement with Diligent comes subsequent to todays filings with the Securities and Exchange Commission in which EMC reported the sale of the subsidiary for $4.6 million, in the form of 1.8 million shares of Diligent preferred stock. The filing also notes that EMC invested another $5 million in Diligent in October in exchange for 2 million shares in the startup.