Legato/EMC deal hailed as reseller opportunity

Win-win for resellers, say industry watchers

EMC's plan to buy enterprise management software vendor Legato will cause little conflict and could be a win-win for resellers, say industry watchers.

The deal is valued at $1.3bn and is likely to be completed in the last quarter of this year.

Mark Walker, enterprise solutions director at distributor Ideal, which supplies both Legato and EMC products, said the move came as no surprise.

"We have a great relationship with Legato, but the company had stagnated in terms of growth. So this is a huge opportunity which takes it to the next stage, and it also strengthens EMC's software."

Walker added that he did not expect channel conflict as there was little overlap between the two companies' software portfolios.

Although both companies provide back-up software, Legato's NetWorker product will ultimately become EMC's backup product. When the deal is complete, Legato will be run as a software division, headed by Legato's current chief executive, David Wright.

EMC's UK and Ireland marketing director, Nigel Ghent, said there will be more cross-selling opportunities because of the good product fit.

"Legato sells predominantly through the channel and I don't envisage any real change in that model. EMC has much higher direct sales, even though this has changed dramatically," he said.

But David Liff, EMEA vice president of storage at Legato rival Computer Associates, said the deal will be tough.

"The hardest of all mergers is a hardware and software vendor. Legato's customer base was very loyal, but we've seen a lot moving away in the past 12 months since rumours of a hardware vendor takeover began," he said.