EMC Reinvents Itself, Again


The Hopkinton, Mass.-based company started in 1979 making office furniture, and two years later moved into the memory upgrade market. It started working with midrange and mainframe storage systems in the late 1980s, introduced its first Symmetrix array in 1990, got into the midrange storage market with its Data General acquisition in 1999, and into the midsize storage channel in 2003.

Now, EMC is once again giving itself a complete makeover by moving into the consumer and SOHO products and services business, based on its pending acquisition of Iomega and its Mozy online data protection service, as well as into online collaboration and social networking around its content management offerings.

Despite a very healthy traditional storage business, the move is essential to EMC as it looks to the future data protection and management needs of customers. For VARs it's important because they will find a increasingly nimble EMC tackling segments of the market it has never operated in before. That leaves VARs with a choice: partner with a brand name vendor remodeling itself to meet customers' changing requirements, or compete against one of the true storage-focused heavyweights.

'Continual Transformation'

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Frank Hauck, executive vice president of global marketing and customer quality, likens EMC's continual transformation to what hockey great Wayne Gretzky said about the best direction to move. "Gretzky said, 'I skate to where the puck is going to be, not where it has been,'" Hauck said. "We're going to where the customer pain point is."

Hauck said that in his previous position as CIO at EMC, he would only listen to sales reps who called on him if they could answer three questions: Can they help me drive revenue? Can they make my company more productive? And can they help me drive better relationships with my customers?

"Customers are looking for strategic partners," he said. "All of us want to broaden the portfolio. We want to allow them to use their content to bring in more business and more leads."

The face of the new EMC was revealed during May's EMC World conference, but it's part of a process that has been going on for years, said Dan Carson, vice president of marketing and business development at Open Systems Solutions Inc., a Willow Grove, Penn.-based solution provider.

"EMC's been increasingly paying attention to the entry marketplace," Carson said. "There's less margin in that market because there's more competition. But it's where the higher growth is."

For EMC, the move into smaller markets is possible because it already has the technology, Carson said. "EMC has been traditionally taking technology from its enterprise side and repositioning it for smaller markets," he said. "For instance, EMC's replication technology has made it from its Legato line to the midrange."

One major change for EMC is to reach into cloud computing by expanding its Mozy online data protection platform with new service offerings.

Hundreds of thousands of individual consumers and thousands of large companies are customers of the Mozy online data protection business, said Joe Tucci, chairman, president and CEO of EMC. "In the future, we want millions of individuals as customers, and more large enterprises, and we want to expand more into the midrange business space," Tucci said.

Cloud Computing

EMC is providing huge growth opportunities to its partners with Mozy, said Vance Checketts, COO for the service. "Cloud computing goes beyond backup," he said. "It includes synchronization, sharing and other things customers can do once their data is in the cloud. And resellers will reap the benefit."

Mozy is EMC's first step into the cloud, Checketts said. "We're keyed to the cloud computing strategy of EMC," he said.

If so, EMC has made a misstep, said Zac Childress, president of DarwinTech, Inc., an Oxford, Mich.-based provider of services to the health-care industry which partnered with Mozy until the EMC acquisition.

DarwinTech was one of the first 10 or 15 resellers of the Mozy and Mozy Pro services, and liked both the technology and the customer service, Childress said.

However, Childress said, EMC raised prices shortly after Mozy was acquired. "We asked Mozy about it," he said. "They said they sent out a notice. But I didn't get it. So I was reselling the service at the old price, but my costs were higher. It's too bad. The home version is great. My wife uses it. It's an outstanding value at $5 per month."

Childress said the Mozy price increase is like a recent advertisement where TV cable company execs are discussing how to raise their company's value, with the concensus being that the best way to do that is to raise prices. "Mozy was a small company and kept costs low," he said. "It was waiting to be bought."

EMC is already taking the service international, and plans to open its first overseas online hosted data center in Ireland this Summer, with others to follow, Checketts said.

"Even for U.S. companies, this is an important move," Checketts said. "A large company like GE (Fairfield, Conn.) won't continue its online storage rollout without an international presence. Many companies, for compliance or emotional reasons, want their data stored locally."

The Iomega Factor

EMC is also expanding its reach to the small business and SOHO hardware market with its pending $213 million Iomega acquisition. Iomega will be the nucleus of a new EMC division that will play on the strength of both storage companies for indirect and direct sales channels, said Jonathan Huberman, CEO of Iomega, and Joel Schwartz, senior vice president and general manager of EMC storage platforms. Huberman, who is slated to head EMC's new Consumer/Small Business Products division, said it 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 such as Intel Corp., Santa Clara, Calif., as well as EMC Retrospect data protection software, the foundation on which EMC's Insignia small-business initiative was launched. The new division will also include at least two services offerings to start, Huberman said.

The first is the Mozy online backup service. The second is a service to create, repurpose, store, share and access personal information online 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."

Randy Day, president of New Dimensions Management Systems Inc., a Troy, Mich.-based solution provider, said the change at EMC might take time because there are already so many vendors in the small business and SOHO market.

"But I think EMC can do it," Day said. "It will take time, and it has to be a smooth transition for it to work well. It will probably take a couple years to see new products from the acquisition. But it shows that they've realized what others saw: small business is the last big growth market."

Talk about synergy between EMC's direct sales reps and small business solution providers is a little more like hot air, Day said. "But it will work in some segments, depending on how they do it. And it depends on how aggressive they will turn the sales over to the channel. Most sales reps, once they have an established account, are extremely reluctant to bring in another salesperson. In this situation, they have to structure the compensation so they'll bring in another sales rep. It's a big challenge."

Keith Norbie, director of the storage division of Nexus Information Systems, a Plymouth, Minn.-based solution provider, said this new focus on the small business, consumer and SOHO market is a new direction for EMC, one that can greatly benefit the channel.

"I could care less what EMC does on the consumer side, Norbie said. "However, the only way the consumer business will work for them if they put in a new high-transaction process. It seems that EMC could reverse-engineer how Iomega works and see how to use it to change the clunky way they do a lot of things."

Content Management Plans

EMC is also remaking the way it handles content management, and is expanding its Documentum content management platform with a number of additions and enhancements over the next 12 months to emphasize ease-of-use, collaboration and social networking. And many of these changes will be available in the SaaS model.

It's an important move as customers look for ways to squeeze more useful information from their data, said Michael Zuckerman, senior vice president of marketing at I-Many, an Edison, N.J.-based contract management software developer which also resells EMC's Documentum products.

Features like social networking can add significant value to an organization's data, Zuckerman said. "Our technology stores contracts," he said. "Being able to use a contract requires a lot of commentary from a company and the lawyers. You can never get enough value from a contract. But today, a lot of information gets lost. Maybe its on sticky notes or in e-mail printouts stuck in a file folder. But its hard to handle online."

Social networking, on the other hand, is about wrapping the data with users' knowledge, Zuckerman said. "People understand the data," he said. "The comments of people around it can be powerful, and very useful. Social networking has the potential to tie this all together."

Mark Lewis, president of EMC's Content Management and Archiving Division, said his organization is focused on such technologies as enterprise search, content management, and automated archiving, and is enhancing its content management and archiving in four solution areas.

The first is transactional content management, which includes applications to optimize business policies around content-centric tasks such as insurance claims, financial transactions, and order processing where data is captured, processed, routed and delivered to where it is needed, Lewis said.

Sometime during the third quarter of this year, EMC plans to introduce advanced form capturing capabilities that squeeze more and more information from forms; a new, easier-to-use user interface for its Documentum TaskSpace 6.5 application for retrieving documents and performing high-volume transaction processing; and the additional integration of EMC's Business Activity Monitoring (BAM) application with Documentum.

EMC also plans to unveil a new version of its Captiva document capture platform in the fourth quarter of this year featuring tighter interoperability with Documentum, Lewis said. The company plans to tighten the relationship between these varied applications with an integrated transactional content management platform by year-end, Lewis said.

The second primary solution area is information compliance, which Lewis said includes discovery and e-discovery technology to archive and search for data according to corporate policies and improve privacy. "We want people to make money, but also to stay out of jail," he said. "This is the 'stay out of jail' piece."

During the third quarter, EMC plans to release a new application, Documentum Archive, which handles records management and archiving as a single platform, and plans to unveil Federated Retention Services to allow corporations to set data retention policies.

By year end, Lewis said to expect a new application which provides archiving and discovery for e-mails using EMC's Documentum platform. The third solution area is knowledge worker focus, which EMC plans to address in the third quarter with Project Magellan, a new online collaboration application aimed at companies who are finding that more and more of their collaboration is done on a global basis and by mobile workers.

Project Magellan includes many elements of social networking, and showed full support for blogs, wikis, and tagging, as well as such features as mashups and folksonomy to let employees know where their colleagues are located. The application will be able to be accessed on mobile devices such as Trios and BlackBerries.

EMC also plans to introduce MyDocumentum, a technology for off-line access to a corporate data archive via mobile devices, in the third quarter, followed in the fourth quarter by a Microsoft Outlook client for Documentum to allow users to access archived data without leaving Outlook, Lewis said.

The fourth solution area is interactive content management, focusing on managing content, personalizing and finding content, and publishing it so it can be accessed from any device from an iPhone to a PC, Lewis said.

EMC plans a third-quarter release of Media Workspace, which allows content developers to access image thumbnails, pick some as favorites, organize them in folders, and add connotations. The application also provides chat capabilities to teams of employees, who can also do side-by-side comparisons of different versions of images.

Early next year, EMC also plans to release a new version of its Digital Access Manager (DAM) that uses technology from its acquisition in 2000 of video broadcasting software developer Avalon to handle the movement of large files such as movies across the Internet, Lewis said.

Going forward, Lewis said that EMC plans to build the consumer experience inside the corporate firewall. Everything will be contextual, with the ability to search for information and pull it together as needed.

Most of these new application will be integrated with Documentum for enterprise users, Lewis said. However, EMC recognizes that, while small and midsize businesses require many of these new capabilities, they seldom can purchase Documentum.

For that reason, EMC will provide many of these applications as a portal to Documentum as a service. "XML and SaaS (software as a service) will be an integral part of all these moves," he said. "We can use XML to share content as a service. We have to treat information management and content management as a service within a group of services."