EMC's 'Simple' Evolution

Friday Mar 11th 2005 by Clint Boulton
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EMC isn't a full-blown systems vendor yet, but it got a step closer with its new Making Storage Simple program.

EMC's slew of software purchases over the last few years has enabled the company to broaden its scope.

This has led to new programs like Making Storage Simple (MSS), unveiled earlier this week to serve small- to medium-sized businesses.

While EMC isn't exactly reinventing itself as a systems vendor, the company is increasingly looking like an IBM, Dell or HP in the fullness of its offerings.

Just four years ago, the idea that EMC would cater to SMBs would seem laughable because the company was so focused on the $1 billion and more accounts of large businesses. It also specialized in making hardware systems and proprietary software to run on them.

But after shelling out more than $3.5 billion on Prisa Networks, Astrum Software, Legato, Documentum, Dantz and VMware, the Hopkinton, Mass., became a software player to be reckoned with.

Mike Wytenus, senior director of mid-market enterprise at EMC, admitted that such a program would be impossible had EMC not snapped up some software to complement its broad hardware systems line.

In a recent interview, Wytenus said that EMC is taking pains not to "dumb down" its high-end provisions or force them down the throats of mid-sized businesses. At the same time, the company seems keenly aware that SMBs can't afford products targeted for the high end.

That leaves them with one option: create new solution bundles that offer rich functionality at a cost affordable to smaller clients. It sounds a lot like what IBM, HP and Dell have done to serve smaller clients, and Wytenus didn't deny the connection.

"The making up ground is a function of executing through the channel with the right solutions," Wytenus said. "In the past, we didn't have a simplified, affordable mechanism to deliver through the channel to reach those hundreds of thousands of customers. We think we have those now through the MSS approach."

Analysts roundly approved the strategy, noting the headroom for business growth in the SMB space.

"EMC has historically not invested in serving the lower segments of the market," said Enterprise Strategy Group analyst Pete Gerr. "But like every other storage vendor, they have acknowledged that the SME, SMB segments are not only going to acquire technology faster than the large enterprise over the next couple of years, but they're also growing at a good rate."

Gerr continued: "So this is a segment that is really underserved by world-class vendors. I think this is EMC's formal program to not only make their partners more successful, but also help those customers who don't have a lot of IT skills or budget but need to protect their storage and grow just like the big guys do."

Pund-IT analyst Charles King said the SMB sector seems to be an especially sweet spot considering the turgid growth of the enterprise IT market. Moreover, he was encouraged that EMC isn't relying on Dell to go to market with MSS, as folks might expect, because of the companies' strong relationship and Dell's expertise in selling to SMBS.

"While HP and Dell have a strong presence among SMBs (largely due to significant depth of low-end offerings and strong Web/retail sales efforts) vendors with traditional ties to large enterprises like IBM and EMC are taking a different tack by expanding SMB-aimed solutions and growing their channel relationships," King said.

So if we put IBM and EMC in the same boat on so many fronts, is that enough to classify EMC as a true systems vendor? Not yet, King said.

"I don't see EMC as a systems vendor in the classic sense, since to me that denotes a company that offers end-to-end solutions of some kind. But I think the company understands that through close, canny partnerships and alliances (Dell, Microsoft, Intel, Cisco) they can be seen as a 'virtual' systems vendor rather than a high-end specialist," King said.

One of the most salient points for Making Storage Simple is that EMC has stepped up its alliances with Cisco, Intel and Microsoft, which was rated by Gartner as one of the top providers for SMBs.

Gerr said he hopes EMC will continue to learn from Intel and Microsoft how to treat its partners. Intel and Microsoft can help teach EMC how to better position and treat the channel. This is a key test because, Gerr said, EMC has had a reputation for not treating its channel partners so well in the past. He expects that to change.

"I see a lot of potential upside here," Gerr said. "Be as critical as you want about EMC as far as their reputation or how they do business, but the fact is the products are consistently among the best, if not the best, out there. If it can execute and treat its channel partners well, the program will do well."

King agreed. He also said IBM and HP can't be too keen on the program.

"Given EMC's success over the past couple of years (while most other vendors' storage sales have been flat or outright disappointing), the company's competitors are unlikely to be happy about this announcement," King said.

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