EMC on acquisition mode

Shubhendu Parth and Zia Askari

NEW DELHI: With 10 acquisitions in three years, including one Indian company, EMC Corporation has both increased its set of customers as well as its expertise in different areas encompassing the envelope of storage. On the sidelines of its $100 million investment plans for India, Shubhendu Parth and Zia Askari of CyberMedia News Service caught up with the company’s Senior VP of Storage Infrastructure Software, Chris Gahagan on EMC’s further acquisition plans, its India initiatives and the trend in storage space. Excerpts:

Q) What is the current focus for your India operations?



Our India operations have grown considerably and we are quite pleased with this. In the month of January this year, we announced that we are going to double the 20 member team at Bangalore within one year. But due to vibrancy in the market, we have exceeded the 50-digit number as of now and we would be increasing this multi fold as we are focusing on India as a major source for our development.


At present, there is a core team of about 20 software professionals working on state of the art storage solution that is at least two years ahead of its times. So it is this kind of futuristic development that is taking place at our Bangalore facility. As of now we have about 9,000 sq ft of space but as we expand, we will be moving out to a new facility very soon. There is a lot of work going on at Bangalore on the Visual SAN line of product and as we move forward the center will see a lot of activity in terms of new products. A considerable part of our $ 100 million will go into this R&D facility at Bangalore.

Q) Why do you think that acquisition is the right way to securing intellect for the company on the long run?



We are always looking for acquisitions. Over the past three years we have acquired 10 companies including one from India. All our acquisitions add value to the overall strategy of the company, which is to provide intelligent storage solutions. As storage evolves, this intelligence is coming from the software, so a major portion of our acquisition comes from the software arena and rest is from hardware.

With the help of acquisition we try to bring in different values and product lines to our portfolio. This gives us dual benefits of increasing the overall intellect for the company as well as working with new clients in different niche areas. However, it is not only acquisition that we bet on. We have a strong policy towards R&D. In fact, for the last year we spent more than $800 million only on R&D activity. This is much more than what our closest competition spends on an average. To strengthen our R&D focus, we have spent more than $ two billion in the development and construction of an interoperability lab in the US. We are simulating different kinds of customer environments in this lab and it is quite necessary for the success of a product.

Q) Why has managing information suddenly become such a hot area? Where is the storage business headed?



It is been long since we have seen that storage needs the combination of strong information management skills and that is what we are doing. Organizations across the world have realized that besides stand-alone storage there is a need for strong information management tools. This has been a challenge for almost all the organizations managing their storage needs and information lifecycle management meets this challenge directly and dynamically by enabling a customer to manage information based on its changing value to the business over time. It means mapping the value of information and the resources to manage it, in order to meet business goals–all at the right time. So moving forward we definitely see that there would be a strong focus on information management.


Besides, there is a certain need to convert the unstructured data into the structured format in the market and that’s where our recent acquisition of Documentum is important. As of now over 60 percent of data is unstructured and all this is going to be converted into the structured format by various means and Documentum is all set to tap this niche market segment.

Q) Information lifecycle management (ILM) seems to be drawing lot of attention these days with almost all the storage players coming up with their version of the solution. How is EMC placed in this space?



ILM is a platform to manage information and storage is a part of that. In fact our acquisition of Legato–which had more than 31,000 customers worldwide, 500 customer facing staff and over 400 partners–has considerably helped us create a space for ourselves in this segment. ILM is doing pretty well in the market as of now and our channel partners in India — HCL, Wipro, Tata Elxsi have done a great job in terms of increasing the market reach. We will continue to explore new partners in this part of the world. We also have global alliances with Dell and Datacraft for the implementation of our products.

Q) What is happening on the acquisition front for the company as of now? Any new plans to acquire storage focused companies in this region?



We are always looking up for the inorganic growth. As of now we are in the process of completing our acquisition of Documentum. We initiated the process in the month of October 2003 and we will be completing the proceedings by the end of first quarter for the next year. EMC has done quite well in terms of revenues — we are expecting to garner about $ six billion for the financial year 2003. Additionally we are having $ six billion of cash with us, so we are ideally placed to continue our acquisition mode. Though we have not identified any future acquisition target, but yes we are open to the idea of growing and adding different blocks to complete the full circle of offerings for the company.

(CyberMedia News Service)