EMC's Iomega Purchase: Big Deal For Small Business Channels

EMC's pending acquisition of Iomega will result in a new EMC division that will play on the strength of both storage companies for indirect sales channels.

That's the consensus of top executives of the two storage vendors who recently sat down with ChannelWeb to discuss the upcoming acquisition.

EMC, Hopkinton, Mass., in early April said it planned to acquire Iomega, of San Diego, for about $213 million.

Jonathan Huberman, CEO of Iomega, is slated to lead EMC's new Consumer/Small Business Products division, which will be centered around the Iomega offering, after the acquisition closes. In that role, Huberman will report to Joel Schwartz, senior vice president and general manager of EMC storage platforms.

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Huberman said that after the acquisition closes, the new division will include a variety of hardware and software products and storage services for the consumer and small business market.

This includes the existing Iomega-branded hardware products, many of which are now being bundled with EMC's LifeLine, a software for OEM vendors of NAS appliances. Intel, of Santa Clara, Calif., also bundles LifeLine with some of its NAS appliances.

The new division will also include EMC Retrospect data protection software. Retrospect came from EMC's acquisition of Dantz in October 2004. With the nearly $50 million deal, EMC obtained Dantz's Retrospect data protection software, including products for the Macintosh platform, and the software became the foundation from which EMC's Insignia small-business initiative was launched last February.

The new division will also include at least two services offerings to start, Huberman said.

The first is the Mozy on-line backup service that EMC received with the $76 million acquisition of Berkeley Data Systems last October.

The second is a service to create, repurpose, store, share, and access personal information on-line via technology EMC got with the February acquisition of Seattle-based Pi.

All these technologies will be available through Iomega's current retail, direct marketing, and distribution channels, Huberman said.

The acquisition will result in an expanded product line that should be of interest to small business solution providers, Schwartz said.

For instance, EMC's channel partners will have access to Iomega's NAS appliances which are not only suitable for small businesses, but also for the distributed data infrastructure of many enterprise customers, Schwartz said.

"When an EMC sales rep talks to customers, he or she can now talk about remote offices," he said. "They couldn't do that before. Not that EMC will take that sale direct. It will go through Iomega's channel partners."

Iomega's current solution providers typically do not touch the larger customers that EMC deals with, Huberman said. "But many CIOs in the EMC customer base can use our products," he said. "Maybe not in their glass houses. But maybe in their smaller offices. Our partners don't have access to that business."

That's business that EMC today has to walk away from, Schwartz said. "Channel partners win because they will be delivering the products," he said.