Software Pickup: EMC Gets Smarts

White Plains, N.Y.-based Smarts' total revenue for 2004 is expected to be around $60 million. The deal is not expected to close until the first quarter of 2005 pending regulatory approval, the companies said in a joint statement.

"This acquisition is about market expansion, innovative technology and growth," EMC President and CEO Joe Tucci said in the statement. "Smarts represents a strategic acquisition for EMC in a complementary, growing market: network systems management."

EMC, Hopkinton, Mass., will dedicate resources to expand Smarts' presence and use its technology to bolster EMC's lead in information and storage management, Tucci said.

The acquisition is the latest in a string of software pickups for EMC, which formed a separate software group to act as an umbrella for its Legato, Documentum and Open Software units. EMC also owns VMware as an independent subsidiary.

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In a call with financial analysts, Howard Elias, EMC's executive vice president for corporate marketing, technology and new business, said most of Smarts' revenue has come via direct sales but he stopped short of detailing EMC's sales strategies for the product line. Shaula Alexander-Yemini, Smarts' founder and CEO, said joining with EMC will help Smarts "build more solutions, build them faster [and] bring them to a larger audience in more geographies than we could ever cover as a smaller company."

Lodi Vercelli, CEO of Midrange Computing Solutions, a Downers Grove, Ill., EMC solution provider, said he's unsure the deal will help EMC as much as its previous acquisitions did. "The acquisitions they have made along the way here--Documentum, even Legato--those things were pretty key and pretty strategic," he said.