EMC tries on VMware for size in third buy of 2003
Vendor makes $635m acquisition of virtual computing firm in final acquisition of the year
Storage vendor EMC ended 2003 with its third major acquisition of the year, buying virtual computing software company VMware for $635m.
Last July EMC bought storage software vendor Legato, then acquired document management company Documentum in September. This latest move brings the total value of the firm's purchases to $3.6bn.
The all-cash VMware deal is intended to give EMC an advantage in Intel-based system environments.
Erez Ofer, EMC's executive vice-president of technology strategy, said the buy was needed to fill-out the firm's infrastructure management offering.
"IBM, Hewlett Packard and Sun control their respective Unix environments, and EMC will interface with them. But this will allow us to gain greater control of our destiny on Intel platforms," he said.
Ofer added that the price represents about three times VMware's projected revenue for 2004, and said the company will continue to be run as an independent unit.
Neil Strange, technical strategy manager for information management at networked storage VAR Omnetica, said: "What everybody now needs is to rapidly deploy and tear down [storage configurations] as requirements change.
"Virtual storage and virtual infrastructure means deploying across multiple sites much more easily, providing a lot of flexibility and resilience in the architecture."
VMware's software enables multiple operating systems, such as Windows, Linux and Novell NetWare, to run simultaneously on a single Intel-based system.
But VMware's upcoming Virtual Center, including VMotion software, may have been the main attraction for EMC. VMotion moves applications between computers without interrupting operations.
EMC is also working with vendors such as Brocade and McData to extend its product set into switches, and VMware's technology is needed in the software core.
"When looking for this technology, VMware stood out. When an opportunity to buy came up, we took it," Ofer said.
The deal is due to be completed in the first quarter of 2004. Ofer said no redundancies are expected.