'Software management and services-not hardware-is making a difference'

In a matter of just three years, storage major EMC, which tethered on the
brink of heavy losses following the dot-com bust in 2001, went through a
remarkable transformation. Its winning formula: moving from its traditional
hardware and big enterprise focus to training its sights on software and
services, and the lucrative SMB space. EMC has acquired 12 companies in the last
four years. Senior VP, Mark Sorenson spoke to Priya Padmanabhan of CyberMedia
about EMC's storage software strategy and SMB focus.

How has EMC's storage strategy changed over the last few years?

Globally, storage expenditure has also gone up, with more than 20% of total
IT spend going into storage. Storage is now more than a peripheral function.
That's what we believe at EMC and so we have morphed from being merely a
storage hardware company to one that focuses on software and Information
Lifecycle Management (ILM). We also changed from targeting the high-end market
to tapping the mid-range. With storage hardware becoming more of a commodity,
software is making a difference in technology. Now, storage hardware constitutes
50%, while software and services makes for the rest of EMC's offerings.

Can you elaborate on the ILM focus?

Mark Sorenson

Storage hardware has become inexpensive and it is estimated that seven to
eight dollar is spent on storage management and services, for every dollar spent
on hardware. Since ILM is an important part of our strategy, we acquired
companies like Dantz, Legato and Documentum.

What is EMC's strategy to tap into the SMB space?

The SMB segment is the largest growth segment and our go-to-market strategy
includes low-cost SAN products such as EMC AX100. For this segment, we need
products that are built from ground up. So we have gone the inorganic way and
will continue with software acquisitions.

How does India figure in EMC's overall business picture?

We have invested around $100 mn so far in India. More than 150 employees
work at the Indian R&D center. In 2000, we were number five in the Indian
market place but today we are number one in the external storage segment. On the
go-to-market side, we have direct sales as well as channel partners through whom
we sell to the SMBs.

With so many acquisitions, how have you managed to brand your SMB
offerings?

The SMB market is influenced by brand awareness. EMC means storage. The bad
news is that it has not been taken down to channels. We are trying to make EMC
prevail in the SMB space. Purchasing Dantz, a 20-year-old company, is a step in
that direction. We have a dual branding strategy. For example, our Legato range
is called EMC Legato where EMC is the master brand and Legato the sub-brand. We
have both high-end and low end products. We want to integrate them and make sure
they are interoperable. Dantz Retrospect will continue as a separate standalone
product. However, we plan to provide a management-level solution for customers
running both NetWorker and Retrospect with a common management console.