EMC Hones Software Focus

At a meeting in New York with financial analysts, EMC CEO Joseph Tucci said the Hopkinton, Mass.-based vendor intends to "fatten" the storage market as it integrates its hardware, software and services businesses. "We're going to get really into the information management business," Tucci said, calling that area a "massive opportunity."

With Information Lifecycle Management, EMC aims to provide an end-to-end approach to data storage and backup that leans more on software. Tucci said the effort centers on developing "better information" on customer data, from creation to archiving to disposal.

Key to that strategy is EMC's $1.3 billion acquisition of Legato Systems, a vendor of heterogeneous backup, restore and content management software. The companies are still working to close the deal, which EMC executives expect to happen by mid-October.

EMC CFO Bill Teuber reiterated the company's goal to eventually drive 30 percent of its overall revenue through software sales. Currently, 22 percent of revenue stems from software, and EMC expects that figure to reach 26 percent after the Legato deal closes.

Plans call for Legato to operate as a subsidiary of EMC, said David Goulden, executive vice president for marketing and new business development at EMC. Legato's partner base has minimal overlap with EMC's and stands to bring the storage giant a channel of about 400 solution providers, he said.

EMC's sharper focus on software reflects trends in the storage industry, solution providers said. Joe Cunningham, general manager of Computer Professionals International, Albany, N.Y., said SAN vendors are focusing on software as a way to differentiate themselves.

"If EMC can focus on such differentiation, it stands a better chance of winning," Cunningham said. EMC's history as a hardware vendor shouldn't be an issue, he added. "I don't think customers really care how they saw EMC before, as long as EMC can deliver going forward."

There's still a lot of room for vendors looking to be a universal supplier of storage management software, since none offers a single package to control everything, said Kevin Hoffman, vice president of sales at Hoffman Technologies, a Sacramento, Calif.-based solution provider. "You can see EMC going that direction," he said.