3 min read

EMC Extends Lead In Storage Management

$1.3 billion acquisition of Legato Systems will expand and improve its offerings
Rogers Medical Intelligence Solutions, which maintains databases of medical information for the pharmaceutical industry, uses two types of EMC storage systems, one to provide quick access to 500 Gbytes of data and another for longer term storage of 5 terabytes of data. Robert Terdeman, senior VP and chief technology officer, says storage-management software is crucial "because we're in the information business, not the data-processing business. We view storage as a utility." His goal is to reduce by as much as possible the amount of time and money spent on storage, and he uses EMC's Control Center to manage it. "In the long run, it's the cheapest storage because I have nobody dedicated to it," he says. "It manages itself, tells me when something is broken, and sends alerts to EMC for the fix."

While Rogers has already made progress, Terdeman says managing data and storage needs to be even more automated. "The industry is finally getting the real issue. Data life-cycle management is essential," he says. Many companies have data stored on old tapes that can no longer be read. "Life-cycle management is automatic protection against storage obsolescence, and that's what we want."

EMC is still the market leader in storage hardware and software. The acquisition of Legato, with its 30,000 customers and a sales force experienced in selling storage-management software, should strengthen its position. But it's facing a tough new competitor in HP, which has combined storage hardware and software products from Compaq with HP's management software and IT services organization to become a formidable full-service storage vendor.

Kathy Walker, senior VP of network services at telecommunications service provider Sprint, says HP is working closely with her to solve storage problems. "We've had continuous access to HP, and it's not always attached to a sale," she says. Sprint has a mix of storage systems from EMC, Hitachi Data Systems, HP, IBM, and Sun Microsystems, but Walker looks to HP for high-end, high-availability software and services. One project involving call and fraud detection has been in the works for five or six years. "HP takes a collaborative approach with our software architects," she says. "That's not readily available for all our vendor relationships."

EMC's software acquisitions should also help it compete more effectively against IBM. The vendors have battled for years in the storage hardware market. But until recently, EMC, which specialized in high-end storage systems, didn't have the full range of management products to match those offered by IBM's Tivoli division.

That leaves Veritas, another leading storage-management software vendor, as the only major competitor without its own hardware. Company officials say they plan to stay independent and count on their ability to react faster and execute better to retain and win new business.

Vendors are expanding their software portfolios in reaction to customer demands, says John McArthur, an analyst at IDC. "Customers want a more complete solution, and software is a big part of that," he says. With storage hardware prices continuing to fall, the shift to software can help the vendors, too. "The margins are better with software. Hardware has become a commodity," he says.

Even so, if 80% of most storage systems aren't being utilized, it's a commodity that isn't being used effectively. That's why business-technology managers hope new and improved storage-management software will help them solve business problems, make it easier to share information throughout an organization, cut costs and support staff, and make better use of storage systems already in place.