EMC Locks Up Online Storage Service

With the closing of a $76 million cash deal, EMC comes away with the online service it sought.

Big EMC and little Berkeley Data Systems made official Oct. 4 what eWEEK reported on Sept. 24: They are now betrothed.

The Hopkinton, Mass.-based data storage and infrastructure giant now has its own online storage property. And BDS, a small company that offers the Mozy Home and Mozy Pro subscription backup plans for free or as little as $3.95 per month, now has in the neighborhood of $76 million in the bank, according to an EMC spokesperson.

Berkeley Data Systems has about 50 employees, with most based in American Fork, Utah, about an hour south of Salt Lake City. It provides unlimited backup as a service that individuals can use to back up digital files—documents, photos, video—to a secure, multi-petabyte outside server on subscription basis.

The deal closed Oct. 1 when the money was wired to BDS bank, founder and CEO Josh Coates told eWEEK. "It isnt like winning the lottery," he said. "The M&A process is kind of like watching paint dry.

"But we couldnt be happier [with the deal]," Coates told eWEEK. "Were based in Utah, so were not moving, and were definitely experiencing rapid growth on the engineering side, so we anticipate hiring more people [for that purpose]."

Coates will stay with EMC as chief technology officer for Advanced Development Products. Hell report to EMC CTO Jeff Nick.

"Its an R&D role," Coates said. "Itll be interesting as the cultures integrate—theyre an East Coast kind of company, and were a more laid-back West Coast kind of company. But we both share kind of an aggressive, take-no-prisoners attitude—were more that attitude on the technical side, and I think EMC is more like that on the sales and marketing side."


Click here to read more about BDS unlimited online storage.

Should Mozys customers expect to look for changes in the online service?

"Nothings going to change, as far as our customers are concerned," Coates said. "Mozys just going to be Mozy, only better."

EMC has been looking for an online property for at least a year. The fact that Mozy has been servicing 300,000-employee GE—one of the worlds three largest companies—since last spring was a key factor in the purchase.

"The online storage model has proven itself to be one of the industrys most admired offerings to safely, cost-effectively back up and recover digital information on PC desktops and small servers," EMC spokesperson Michael Gallant said to eWEEK.

"This expands EMCs portfolio in backup and recovery products to be able to go from the core data center out to the very edge. We now have a leading backup and recovery solution for every point in the content creation life cycle—from the individual at the home to the smaller office—up to the largest data centers," Gallant said.

Reaction to the deal was mixed from a couple of Mozys competitors—Carbonite CEO David Friend and BeInSync Vice President of Marketing Adi Ruppin.

"I think EMC had a good move with the deal, even though some people think the price was too high for a relatively new company with not that much income," said Friend, in Boston. "Actually, I think it was a smart buy for EMC. If they [BDS] would have waited for a year or so, they might have been able to add another zero on the end of the price.

"Since we are primarily aimed at the consumer online backup market, this is a great way for our top competitor to be taken out. EMC is focused on the enterprise."

Friend said EMC "kicked our tires" and checked out Carbonite but wasnt as interested in the companys consumer-oriented focus.

Ruppin, whose Tel Aviv-based company resells the Amazon S3 online service on a subscription basis but adds a number of valued features (encryption, data sharing and others), told eWEEK he thought it wasnt the smartest deal in the world for EMC.

"EMC didnt have to spend $76 million to buy a company like Mozy," Ruppin said. "They could have done what we did: use a tested, competent service like S3 and add their own value-add [features] to the package. Now theyre re-inventing the wheel. Not so smart."


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Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 13 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...