EMC's rise to domination
US-based computer storage company EMC recently announced the acquisition of RSA Security, also based in the US. The deal is for $2.1 billion.
RSA brings a big plus to EMC, the ability to encrypt stored data and the availability of authentication tools for guarding that data further. Security is becoming a critical concern for companies, as data theft has become a daily story in the papers. In fact, we saw a similar deal last year between Symantec and Veritas.
EMC is the world leader in storage systems, building a variety of solutions for corporate users. These include RAID arrays, used to protect against disk crashes, as well as storage-area networks, meant for increasing data availability across a network. It works closely with hardware and software providers including Dell, Cisco, SAP, Oracle, and others.
Like other successful companies in the IT industry, it has been a major acquisition engine. Founded in 1979, it has acquired around 20 companies is the last few years, most of them far smaller than RSA. These purchases have almost all been in software and services rather than hardware.
And they are likely to continue. In a ZDNet column ("EMC acquires more companies but wants more respect", 6/20/06), industry expert Dan Farber writes:
It looks as though part of EMC's strategy, like Oracle's, is to just keep buying software and services companies, in hopes that gaining more share of wallet among customers will justify a higher market cap. [EMC CEO] Lewis identified five infrastructure areas-VMware, content management, resource management, storage virtualization and security-as $1 billion businesses in the making via organic growth and acquisitions. He didn't rule out a big bang acquisition, but said that the smaller, string of pearls approach to acquisitions is the preferred path to helping gain the respect he thinks the company deserves,
Here are the most important recent EMC acquistions.
2006
- nLayers, which makes software which maps and analyzes traffic between computers and servers
- Interlink Resources, a consulting company, which specializes in managing and configuring Microsoft-based networks
- Authenica, specializing in e-mail and text-message security
- Kashya, which specializes in data replication software
- Internosis, another consulting company which specializes in managing and configuring Microsoft-based networks
- Akimbi Systems, software development coordination software
- ProActivity, content-management software
2005
- Captiva Software, a software company that specializes in document data capture from scanners
- Rainfinity, a company that develops network visualization software
Acartus, a enterprise archiving software company
2004
- SMARTS, a developer of real-time network management software
- Dantz Development, a supplier of backup and recovery software for small businesses
2003
- VMware, developer of virtual information management software
- Documentum (a $1.7 billion deal), a developer of content management software
- LEGATO ($1.3 billion), specializing in content management and data recovery.
- Astrum Software, storage management software for small- and mid-size companies
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