EMC Sucks Up Astrum

EMC Corp. (NYSE: EMC) today announced the acquisition of storage resource management (SRM) startup Astrum Software Corp. -- coming less than seven months after EMC bought another SAN management player, Prisa Software (see EMC Acquires Astrum Software and EMC Acquires Prisa).

The financial terms of the Astrum deal weren't disclosed, although EMC spokesman Greg Eden says it was all cash. Astrum had raised $6.3 million total to date, primarily from JMI Equity Fund LP; other investors included Ironside Ventures LLC and Morgan Keegan & Company Inc.

It's safe to assume EMC paid somewhere north of $6.3 million for Astrum. But seeing as EMC had $1.7 billion in cash and cash equivalents as of Dec. 31, 2002, this is hardly a blot on the balance sheet.

An industry source speculates that Astrum's VCs pulled the plug -- and that EMC picked up the company for a relative bargain. "Their last round was in early 2001, and they had issues growing like all other the other small SRM players," the source says.

EMC says it will continue Astrum's existing OEM deal with tape library and storage software vendor Overland Storage Inc. (Nasdaq: OVRL), which those two companies struck in mid-2002 (see Overland Takes Software Route)."This is a win-win all around, for us, EMC, and Overland," says Robert Infantino, founder and executive VP of business development at Astrum. "This product fits very nicely in EMC's channel strategy, especially with Dell Computer Corp."

However, the acquisition of Astrum shows that EMC hadn't fleshed out its SRM story to the extent it had let on (see EMC to Acquire Prisa, Finally).

What's the deal? EMC's Eden maintains that Astrum and Prisa Networks, for which it paid about $20 million, are complementary. Prisa's VisualSAN provides entry-level and midtier customers with storage network topology maps, whereas Astrum's StorScape focuses on file management and enforcing storage quotas. However, he adds that it's too soon to tell how Astrum will fit exactly into EMC's portfolio (see Astrum Catches 11 Sweet Ones).

Boston-based Astrum has around 30 employees, most of whom are expected to join EMC's Open Software Operations group. Dan Haley, Astrum's president and CEO, will handle the transition between the two companies. Infantino, meanwhile, says he's currently in discussions with EMC about whether he'll join the company. Prior to founding Astrum, Infantino was founder and president of AcerSoft, which developed storage management software for Windows and OpenVMS, and was also cofounder and VP of sales for Acorn Software, a vendor of OpenVMS storage software (see Astrum Hooks New CEO and Astrum Scouts for New CEO).

EMC reports its first-quarter 2003 earnings tomorrow before the bell.Todd Spangler, US Editor, Byte and Switch