News Review: EMC purchase Documentum and VMWare
Why destroy a Storage Hardware company by purchasing a software virtualisation company ? Have EMC gone mad ?
Why, oh why did EMC decide to diversify into "Application Provisioning" ?
One of the key messages from any Business School is that a company, in order to survive in the modern era, must concentrate on it's core competency. Whilst EMC have proclaimed themselves to be a "Software House" for some time, there may be people who doubt this. I still see EMC as a storage vendor. They produce rock-solid disk arrays with built-in replication for datacentre applications. The "Software" part of the deal comes from the complex system management and firmware which actually shifts blocks of data around without losing any.
So does this mark a shift of policy from EMC ? If so, is it a wise one ? Thre is no doubt that the purchase, firstly of Documentum, and then followed shortly after by VMWare, represents a shock to the market. Foolhardy ? Or a bold way of taking the Initiative ?
The first shots - Legato
The first inkling of a change in EMC strategy came with the takeover of the ailing Legato. In retrospect, this may have signalled a change of direction, if people had noticed it. Personally, I didn't. I just saw a chance for EMC to muscle into the backup/recovery world by getting Legato to fly on Symmetrix rigs.
However, it seems that there was more happening. Firstly, EMC's dominance of the Storage market is fading. Whereas in the past any company wanting replicating disk arrays would have to OEM the Symmetrix rig, this technology is now out in the Open. Witness HP's sudden decision to jump ship to Fujitsu, and then to gain Compaq StorageWorks. IBM "Shark" technology is gaining ground. Even Sun Storage is no longer just EMC-centric. And that's all before taking into account the new kids on the block like BlueArc. So, with the hardware market becoming more competitive, EMC needed to find a Unique Business Proposition to justify it's premium price.
Storage, even high-end Storage, is increasingly being seen as a commodity. This then raised the question of "What is all this storage being used for ?" What EMC appear to have done is to recognise that Storage is not just bits and bytes, but actual useful data. And that data has a meaning, a context, and an Application to which it is associated. Hence the purchase of Documentum and VMWare.
Documentum
Documentum, managed by Dave DeWalt (whom I have a great deal of personal respect for) is concerned with Content Management. By purchasing Documentum, EMC has signalled that it understands that the type and nature of data is just as important as it's quantity.
When all is said and done, customers don't really want to have storage. They want to have their web site contents up-to-date, their email, Office files and business transactions stored in a secure, relevant, contextual way. The issue was not "Can you manage my storage", but rather "can you manage my disparate mish-mash of multiple application content?". And most of this content is now high-volume, graphical, multi-media, video, etc.
Seen in this light, the Documentum purchase is an attempt to move up the Software stack from storage blocks (even to filesystems, and DBMS - as was done by the OEM of the Precise Oracle Monitoring suite), up to understanding content, and how to manipulate it. If this is really EMC's objective, I predict further aquisitions, particularly to do with Database and Email Storage management... watch this space.
But the next real story is Vitualisation. Hence VMWare.
VMWare
So, EMC start working on understanding the Content of their Terabytes of storage, to give extra value-add. So why now go to VMWare?
The answer, in my opinon, is that EMC are being even smarter, and looking not just to Content, but also to the Virtualisation of that Content.
Once you have got the data categorised and organised by "Meaning", you then have to think about answering the question "Where is it ?" With a Virtualisation solution, the answer is "I don't care" - provided that it is accessable. It's not just having a Storage hierarchy - Online/ Near-line/ Off-line etc. It's about being able to re-position and re-structure meaningful storage on-the-fly.
Bear in mind also the work which Veritas has been doing, silently, and behind-the-scenes. With Veritas, you begin to see a vision where you can have clustering (any Operating System), Storage Replication (any Hardware), Backup (any Filesystem).
Theoretically, EMC will be able to create a technology which could re-locate a complete set of servers, applications and disk storage into another physical or logical location without interruption of service. - That's a powerful message.
IBM, Sun, HP and other have been using VMWare for virtualisation of Servers for some time, for datacentre consolidation etc. EMC's purchase puts a new twist on this approach. They must be kicking themselves.
Putting the pieces together
EMC are no strangers to takeovers, having absorbed DataGeneral with what appears to be considerable success. But that takeover was motivated by a desire to sell Clariion hardware, which fits closely with EMC's expertise. This is an entirely different story.
EMC will have to get some very smart management on board if they are not only to absorb three companies, but also to re-focus the entire mega-organisation in a new direction. All without losing their traditional market share to the likes of Fujitsu or BlueArc.
If Joe Tucci is right, the world has moved on, and the Virtualisation Game is the one to be in. Maybe this is the final end of the old-fashioned Hardware Vendors. Maybe the real fight is in the Virtualisation Stack.
If Virtualisation is the real way forward, then not only Hardware (CPUs, Memory, Disk Storage etc.) but also System and Utility Software (File Systems, DBMS, Messaging Systems and even Application Servers) become just another commodity. The real differentiator for a company is their Virtualisation Layer. If so, EMC have made some of the smartest moves of any company in 2003.
Reviewed by Dennis Adams in January 2004