EMC's proposed acquisition of Legato Systems, announced just days before the start of this week's CA World, highlighted the importance of storage management software to many key players in the IT space, including Computer Associates International.
CA, which along with Veritas Software ranks among the top independent storage software vendors according to research firm Gartner, does not expect to see any impact on its business from the EMC purchase in the short term, except for a chance to revisit Legato's NetWorker customers to emphasize that their vendor is no longer hardware-independent, said Bob Davis, vice president of CA's BrightStor storage solutions.
NetWorker is Legato's flagship backup application.
With the Legato purchase, No. 6 data backup software vendor EMC will vault past No. 4 CA to the No. 3 spot, becoming more of a threat to No. 1 Veritas, said Ray Paquet, vice president at Gartner. Paquet said EMC's digestion of Legato will improve its competitiveness against CA and especially Veritas, but Veritas should not be nervous. "Feel more pressure? Yes," he said. "Lose its No. 1 position? No."
The acquisition will also bring ambiguity to the market, said Davis. "As EMC digests the acquisition, it will be difficult for them," he said. "EMC is a hardware vendor, so there will be a lot of questions about cross-platform integration."
Davis acknowledged that CA's storage software offering is also the result of several major acquisitions, but he said CA is past any integration issues.
Don Langeberg, director of marketing in the Storage Software Division of Hewlett-Packard, which is the fifth-largest supplier of backup and restore software, said Veritas has a lock on that market, and the $1.3 billion EMC plans to pay for Legato is "a lot of money for a second-tier product."
Langeberg said Legato's clients should be concerned about whether EMC will honor Legato product development schedules, and whether EMC will make another software acquisition in the near future. "If they [do], they will spend the next couple of years looking at how to integrate and develop a common look and feel," he said.
Another concern of many industry observers is whether EMC will continue to honor OEM arrangements Legato has made with several competitors, including Sun Microsystems, HP and StorageTek.
Executives from several such vendors said they expect no change in their arrangements, and Gartner's Paquet agreed. "It would be foolish for EMC to stop them now," he said. "It would send a message that it is not an open software company. Other ISVs would have a field day with that perception."
George Symons, CTO of Legato, shrugged off concerns about the pending acquisition, saying that unlike its competitors, EMC remains focused on storage. EMC has a strong software position, he said, and Legato brings it both a direct-sales force and an indirect channel for software sales, which should remain independent but work with EMC's hardware sales organizations after the acquisition closes. "Customers today want to buy from a single vendor," he said. "They don't want to get locked [in], but they do want to do more single-sourcing."