EMC Bans MSG

EMC Corp. (NYSE: EMC)has quietly pulled the plug on its media solutions group (MSG) as part of a move to cut back its R&D costs.

During an abysmal third-quarter earnings call last month, EMC saidit would reduce its annual spending on research and development from close to $1 billion a year to less than $800 million, to bring its costs in line with its lowered revenue projections (see EMC Bombs Big-Time).

The media solutions group is the first unit within EMC to fall under the hammer.

At its peak two years ago, the MSG organization comprised more than 200 people, according to EMC officials. The majority of these employees have either been laid off, or have been absorbed into other areas of the company.

The group oversaw the Celerra Media Server, a file server optimized for video files and streaming media. This was discontinued earlier this year due to a lack of demand.EMC says it has not turned its back on the rich media business, which is said to be one of the major growth areas driving the storage networking market.

On the contrary, it says its Symmetrix and Clariion product lines have evolved over time to handle many of the demands for rich media. Sony Corp. of America

apparently OEMs Clariion for its XRPI digital content creation system; and Avid Technology uses the same product for editing the execrable Survivor TV series, along with several movies.

Others say EMCs decision to axe its rich media group was a mistake. Storage service provider Scale Eight Inc., for example, claims it is winning more business in the streaming media market since EMC closed this unit.

"EMC has treated its storage systems as a hammerand every target market -- including media -- as a nail,” said a spokesperson from Scale Eight. ImageState, a Scale Eight customer, says media customers need to share files as they are created, edited, and distributed from widely different locations, and EMC's aging technology can't provide that. Scale Eight's global file system was built to provide just this file-sharing capability, the company said (see Scale Eight Wins With ImageState).

EMC’s Media group has been active in the courts lately too (see EMC Forces Out SANgate CEO).— Jo Maitland, Senior Editor, Byte and Switch
http://www.byteandswitch.com