EMC: The Software Company
EMC's acquisition of Legato Systems raises interesting questions
EMC announced it was acquiring storage software vendor Legato Systems—an industry rumor since last January. The move came on the heels of an announcement in late June that the Hopkinton, MA giant was acquiring the open systems storage management software assets of BMC Software, which had earlier this year left several dozen customers in the lurch when it announced that it was getting out of the open systems storage software business altogether.
The latest acquisition promises to create an oligarchy of four companies, EMC, IBM, Veritas, and Microsoft, in the storage management software space—five, if you want to count Computer Associates—with lots of small fries taking little bits of the $10 to $17 billion market, depending on which analyst you believe. The key objective of each company is to own the “smarts” of the storage infrastructure, having failed (in the case of EMC and IBM, at least) to gain clear dominance in storage hardware.
For all four vendors, the game plan appears to be much the same. Create an overarching management framework and tool suite, partner with as many product providers as possible to contribute their API support (e.g., to play along), and remake the world of storage in your own image.
The vision of each vendor holds that if you deploy Storage Tank (IBM), or AutoIS (EMC), or whatever Veritas is calling its stuff this week, or only Microsoft operating system software, you will make your world a better place: more storage will be able to be managed by fewer people.
The problem is that, historically, things don’t work that way. In general, customers tend to find single vendor management software suites and frameworks to be kludgy. Often, components acquired from third parties through acquisitions and buyouts take quite awhile to become truly integrated with existing products. In many cases, customers report that product suites force them to license a lot of stuff that they don’t need or for which better point product alternatives exist in the market just to get a few products that they want.
Interestingly, in the press accounts around the announcement, EMC spokespersons emphasized Legato’s “storage lifecycle management” technology as a key value accrued to the vendor from the acquisition. Indeed, the two companies had teamed for some time to come up with a way to enable the automated identification and selection of “fixed content” or “reference” data that needed to be moved off expensive storage platforms and out onto EMC’s long-term/seldom-referenced/must-keep storage platform offering, Centerra. Apparently, this partnership wasn’t enough: EMC needed to own the company.
Legato backers get over a billion bucks in the deal. I can’t think of anyone who deserves it more than David Wright or David Beamer and the others who helped bring the company back from the brink of disaster a few years ago.
But the fundamental questions—“Why the acquisition?” and “Why now?”—remain unanswered. I doubt that EMC really needed backup software of its own to fill out its software suite. Moreover, replication and mirroring have been a forte of the company and most of the large-scale EMC shops I have visited seemed to have preferred disk-to-disk data protection solutions to disk-to-tape.
EMC had some pretty good, platform-agnostic, virtual tape software a while back and, instead of developing it as proof of its new, kinder, gentler “Switzerland of Storage” image, sold it off to Diligent Technologies. So Legato’s tape solutions seem unlikely to be the crown jewels that the Hopkinton crowd coveted.
Could a peripheral value of the move be that time-honored tactic of isolating, then overwhelming, a competitor? The Legato acquisition does seem to throw the wrench into all of the work that Legato has been doing with Network Appliance over the past several years. The two companies have worked together to provide back-end backup and disk snapping solutions for NetApp filers that involved the exchange of secret keys and codes. If Legato is now owned by EMC, such intellectual property exchanges would seem to be at odds with EMC’s ongoing quest to beat Network Appliance at its own game in the NAS market, a market that NetApp almost single-handedly invented.
While we are pondering that issue, ask yourself another question: What does the potential loss of Legato mean for NetApp customers in terms of their product support?
Change is always disruptive. It requires storage planners to consider new angles as they determine the products and strategies they will deploy in their own shops. Please watch this space as we continue to puzzle out the storage management software landscape.
EMC Resurrects BMC Patrol: http://info.101com.com/default.asp?id=2026
Jon William Toigo is chairman of The Data Management Institute, the CEO of data management consulting and research firm Toigo Partners International, as well as a contributing editor to Enterprise Systems and its Storage Strategies columnist. Mr. Toigo is the author of 14 books, including Disaster Recovery Planning, 3rd Edition, and The Holy Grail of Network Storage Management, both from Prentice Hall.