EMC Marries Documentum and Legato Divisions

UPDATED: The new Storage Software Group will be focused on helping EMC solidify its information lifecycle management push with tangible products.

NEW YORK—EMC Corp. told a group of analysts at an event here Thursday that its Documentum and Legato Software divisions will operate as an integrated entity alongside other EMC software offerings under the newly unveiled EMC Software Group.

The Hopkinton, Mass., storage makers new Software Group faces lofty internal expectations. Joe Tucci, EMCs president and CEO, announced at EMCs Analyst Day 2004 Conference that software license and services revenues are targeted to reach approximately $1.5 billion for the full 2004 calendar year, with a target for the full company of $8.1 billion in revenue.

"I believe its within our reach [to get] $850 million in income this year," Tucci said. "Im telling you, this is it. Were not playing games."

Stocked with 1,660 developers and 865 sales representatives, the EMC Software Group will be squarely focused on helping EMC solidify its ILM, or information lifecycle management, push with tangible products. The software coming from the group will help customers overcome a variety of data movement, regulatory compliance, backup, e-mail and content management hurdles, Tucci noted.

Tucci said the groundwork has already been laid to build a common management interface for Documentum and Legato across its product set backbone.

"Weve got a pretty good jump with ControlCenter. This isnt something were starting from scratch," said Tucci.

EMC last year bought Documentum, which develops enterprise content management software, for about $1.7 billion, and it bought Legato, which makes data backup and archiving software, for about $1.3 billion.

"EMC Software Group will combine open systems and [EMC] products like ControlCenter and OpenPath, Legato, and Documentum," said Tucci. "If we want to do more acquisitions we have a place to put it and have good synergy right away."

The new business unit will be co-led by EMC executive vice presidents David DeWalt, who formerly headed Documentum, and Mark Lewis.

VMWare, a server virtualization software maker that EMC acquired early this year, will not be part of the EMC Software Group, according to Tucci. Instead, VMWare will be run as a separate EMC business unit creating "virtual infrastructure" technology to power EMCs ILM and utility computing designs.

"I made a commitment to [IBM CEO] Sam Palmisano and [Hewlett-Packard Co. Chairman and CEO] Carly Fiorina, who were big partners of VMWare. I said we would operate VMWare at an arms-length separate subsidiary," Tucci said.

Next page: Advantage IBM?