EMC Forms New Software Group

Banking on the high profitability and growth of its software business, storage vendor EMC has created a dedicated unit that combines its Legato, Documentum and Open Software organizations under one umbrella.

Dubbed the EMC Software Group, the unit will be co-managed by executive vice presidents David De Walt and Mark Lewis. VMWare, a recent EMC acquisition, will continue to be run as a separate, wholly owned subsidiary and will continue to work with EMC competitors. But with EMC's sharpened focus on the software stack of its solutions, the Hopkinton, Mass.-based company aims to snare market share from rival Veritas Software, De Walt said.

"We have to beat Veritas, and we are," De Walt said. "I've already been sticking pins in my [Veritas CEO] Gary Bloom doll," he quipped.

Over the past several years, EMC has acquired roughly a dozen software companies. By realigning its burgeoning software operations, the storage giant is essentially creating a $1.5 billion software organization with 4,000 employees, including more than 1,600 developers.

EMC executives announced the new software group during a meeting with financial analysts in New York. CEO Joseph Tucci said the company's software unit would be responsible for driving growth and profitability. He predicted that EMC would see a profit of $850 million on revenue of $8.1 billion for 2004. Of that, software sales and profitability would outpace that of EMC's hardware business, Tucci added.