EMC Casts Wider Net

NEW YORK -- EMC Corp. (NYSE: EMC) today sketched out new product initiatives, including some that go beyond storage into networking.

CEO Joe Tucci says EMC will launch a network resource management platform based on its Smarts acquisition, add continuous data protection (CDP), and emphasize security across its products as part of our most prolific product rollout ever" over the next eight or nine months. That rollout already began with recent upgrades of Symmetrix and Clariion storage systems (see EMC Cultivates Clariion and EMC Swells Its High End).

EMC executives pointed to two specific software products and hinted that several more would come out later this year. One is a resource management application called Storage Insight, which will appear as a module for EMC’s Control Center storage resource management software. The technology will eventually expand to network and server management and modeling.

Tucci also forecasts a greater role for VMware server virtualization software in EMC’s product line as it moves toward what he calls information infrastructure.

“Will we do things beyond storage? The answer is obviously yes,” Tucci said. “That train has left the station. VMware is outside storage. Smarts is outside storage.”EMC acquired VMware for $635 million in December 2003 and runs it as a separate division (see EMC Gobbles VMware). Tucci says VMWare revenue could hit $400 million this year. EMC added Smarts for $260 million in December (see EMC Gets Smarts and EMC 'Paying Too Much' for Smarts).

Moving into networking brings EMC new competition, possibly from its partner Cisco Systems Inc. (Nasdaq: CSCO) down the road. EMC sells Cisco Fibre Channel switches, Cisco resells EMC’s NAS, and there is speculation that Cisco will eventually sell EMC Clariion SAN systems -- though both companies deny this (see Cisco & EMC Close NAS Deal).

“Cisco is 100 percent aware of what we’re doing in that space,” says Tucci, careful not to step on his partners’ toes. “We’ll see the partnership get stronger. There is no relationship in this business without some overlap, but the core of their business and the core of our business are 95 percent complementary.”

EMC also plans to bring out its first CDP product later this year, as part of its disk-to-disk backup strategy. CDP allows users to go back to any point in time to restore data in case of a disk failure or human error. EMC chief development officer Mark Lewis says the company’s first CDP product will be a network-based appliance complementary to EMC’s replication software (see CDP: Calling It Right and B&S Insider Covers CDP). CDP will likely expand into other EMC products, including its Invista storage virtualization appliance (see EMC Unveils Invista).

EMC’s security plans are less clear. Lewis calls security methods such as encryption and antivirus software “fingers in the dike” and says security will be “pervasive in the products we sell. We believe security needs to be embedded in all of our products.”Perhaps the talk of security is EMC’s answer to Symantec Corp.’s (Nasdaq: SYMC) acquisition of Veritas and Network Appliance Inc.’s (Nasdaq: NTAP) acquisition of Decru (see Symantec & Veritas: It's a Deal, NetApp Buys Decru, and Wedding of the Year). Both deals brought security and storage together. “They were absolutely right,” Lewis says of the strategy behind those deals. “But we don’t believe we’re behind -- we’re competitive in our space.”

EMC last week forged reseller deals with Decru and rival encryption appliance startup NeoScale Systems Inc. (see EMC to Resell Decru, NeoScale). EMC expects to continue to resell Decru even after NetApp closes the acquisition.

EMC executives say the technologies behind its new initiatives will come from a combination of its own development, partnerships, and acquisitions. CFO Bill Teuber says EMC had $7.64 billion in cash at the end of Q2 and will continue to aggressively pursue acquisitions.

— Dave Raffo, Senior Editor, Byte and Switch