EMC Resumes Software Shopping Spree

High-end storage-hardware vendor EMC Corp. last week continued its efforts to transform itself into a software company. EMC added to its string of software acquisitions, disclosing plans to acquire VMware Inc. for around $635 million in cash.

VMware sells software that lets customers run different operating systems, or several versions of the same operating system, on a single computer. The use of these so-called virtual machines has been common on mainframes for many years. VMware's software is used on lower-cost machines powered by chips from Intel and Advanced Micro Devices Inc. Virtualization takes computing resources on different servers and storage capacity on various storage systems and makes them appear to be a single pool of resources that can be allocated as needed.

EMC hopes to combine its own storage-virtualization capabilities with VMware's to offer a single software platform for virtualizing servers and storage, and have it work well with information-management functionality from Documentum and Legato, two software vendors EMC bought earlier this year. "Enough storage is connected to the network now so we can reach the servers without having to administer them one by one," says Chris Gahagan, senior VP of infrastructure software at EMC.

Analysts had mixed reactions. "Legato gave them a lot of server functionality already," says Yankee Group analyst Stephanie Balaouras. "VMware appears redundant." But Steve Kenniston, an analyst at the Enterprise Storage Group, says the deal will help EMC compete. Now that there's a big company behind VMware, it may grab "customers that wouldn't buy from a small vendor."