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EMC puts voodoo in new software biz

Pokes Veritas full of holes

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It's fitting that in a week in which Ronald Reagan and his voodoo economics passed, EMC has stepped up with a voodoo data protection plan.

"We have to beat Veritas, and we are," David De Walt, an EVP at EMC, told CRN. "I've already been sticking pins in my (Veritas CEO) Gary Bloom doll."

The voodoo tactic is just one part of a revamped software strategy announced today by EMC at its analyst conference in New York. EMC has created a new Software Group organization that combines the products and operations EMC acquired from Legato and Documentum with its own existing software business. VMware, EMC's third main acquisition, will continue to operate on its own as a subsidiary. Smart move there.

DeWalt and his doll army will manage the software business with fellow EVP Mark Lewis.

EMC expects to pull in close to $1.5bn in revenue with its software license and services revenue combined over the course of 2004. That's out of a $8.1bn total forecast for the company's entire 2004 revenue.

EMC has long been very vocal about wanting software to account for a larger chunk of overall revenue. The days of over-priced storage systems are fading due to ever-lowering disk costs and competition. That's precisely why EMC paid billions for Legato, Documentum and VMware.

It makes sense to operate VMware on its own as the company has close ties to EMC rivals IBM and HP. VMware is basically the industry standard software maker for partitioning applications on x86 workstations and servers.

Analysts had been wondering how EMC would deal with its numerous acquisitions and today's move answers those questions. EMC will now have its entire fleet of storage management software, including ControlCenter and OpenPath, under one roof. VMware will no doubt be invited to contribute server-side help where needed.

None of this, however, changes the basic problems facing EMC.

Storage customers are yearning for what they see as "open" management software. The open category is Veritas's forte, and the company has beefed up its arsenal this year with a host of its own acquisitions. Veritas is without doubt considered a friendlier vendor in the software arena, which is something voodoo dolls may not help change.

And, on a larger scale, vendors such as HP, IBM and Sun have stronger stories to tell, at this point, about managing server and storage systems together. EMC is weak on the server-side, with its rivals having about a two-year lead on the "whole package" management idea.

That said, EMC has been performing well of late and appears determined to succeed as a software company. ®

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