As EMC, the leading enterprise storage vendor, continues to acquire its way to becoming a software powerhouse—most recently agreeing to buy RSA Security for $2.1 billion—its worth asking where the company is headed and how well its corporate strategy is serving corporate IT.
We take a skeptical view of mergers and acquisitions because they reduce the number of vendors in the marketplace—and thereby reduce customer choice.
In addition, they are difficult to execute, and can turn two competent companies into one incompetent one. Often, during the consolidation process, management conflicts arise; travel budgets balloon; customer service lags; and products fall by the wayside, leaving the customers that have depended on them no recourse.
That said, without mergers and acquisitions, we wouldnt have the industry we have today. Cisco Systems would not exist as we know it; IBM and Microsoft wouldnt either.
These companies have built out their portfolios by acquiring, generally, much smaller companies—on the whole, a more successful approach than attempting to weld together two disparate giants.
So what kind of acquisition will EMC-RSA turn out to be?
Wall Street analysts gagged at the hefty price paid by EMC, and rightly so, but on balance, we think EMC-RSA falls into the category of beneficial mergers.
The key will be the integration of RSA technology into EMCs products—something that EMC CEO Joe Tucci says is part of the plan, although in the merger announcement, he did not unfurl a detailed road map of just what technologies will appear where, and when.
EMC already has a vast software portfolio, most of it from previous acquisitions such as VMware and Documentum, and RSA identity and access management technology should become part of just about every software product that EMC makes. An obvious place to start is with the companys Documentum products—Documentum eRoom, in fact, is already integrated with RSA technology.
More important, however, is integration of RSA technologies with EMCs ControlCenter. EMCs SANs (storage area networks), switches, and storage and backup arrays are all managed by Web-based interfaces, which are inherently vulnerable to hack attacks. Tightening those management tools with RSA technologies would be a tremendous benefit to enterprise IT.
EMC has its work cut out, though. If the acquisition of Veritas by Symantec last year—and the subsequent dearth of integrated products—is any indication, integration of security and storage software is hardly a snap.
But without tight integration, EMC will have paid far too much merely to gain the halo effect that goes with being the owner of a well-respected security division. Customers already can, after all, buy EMC and RSA products separately.
Without question, EMC paid dearly for RSA. Now, EMC must pay the additional price of laborious integration.
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eWeeks Editorial Board consists of Jason Brooks, Jeffrey Burt, Larry Dignan, Stan Gibson, Scot Petersen and Lisa Vaas.