EMC Moves Into Online Backup

EMC made its acquisition of Mozy parent Berkeley Data Systems official today, but the storage giant doesn’t have much planned for its new online backup unit, at least that company officials will reveal.

The deal, rumored to be in the works last week, is a big change for EMC, moving the company into the consumer market and an internet-based business model.

EMC public relations director Michael Gallant called the acquisition “a business model shift.”

“It allows us to go from the data center all the way out to the edge,” he said, reaching smaller businesses, remote offices and consumers. Gallant said EMC could use the service to protect corporate desktops and laptops too.

EMC will add Berkeley Data Systems to its new ventures group and run it as a standalone business. That said, the company doesn’t plan any specialized service offerings for its new online backup business. Gallant said EMC will continue to invest in the business and build the Mozy brand, but added that “any further roadmap details we’re not prepared to share.”

Gallant said preliminary IDC research shows the online backup market growing 80 percent a year to $1.8 billion by 2009. And 70 percent of new data is created by individuals who increasingly expect enterprise-like data protection at lower cost.

Those changing dynamics made the market a ripe one for EMC’s entry.

Baird analyst Daniel Renouard wrote in a research note that “Although EMC does not today have a strong retail/consumer presence, we believe the Mozy acquisition fits strategically within EMC’s management/archiving and potentially Software as a Service strategy (EMC has previously mentioned plans to offer a SaaS platform for storage/backup), and likely will provide EMC another way to access the SMB storage market.”

EMC did not reveal details of the transaction, saying it “will not have a material impact” on financial results, but the price was rumored to be $76 million. Two-year-old Mozy boasts about 300,000 consumer and business customers, including GE.

Berkeley Data Systems founder and CEO Josh Coates will become an EMC CTO and remain “very involved in day-to-day business operations,” said Gallant. Most Berkeley employees will stay on too.

“This acquisition is about growth and expansion,” said Gallant.

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Paul Shread
Paul Shread
eSecurity Editor Paul Shread has covered nearly every aspect of enterprise technology in his 20+ years in IT journalism, including an award-winning series on software-defined data centers. He wrote a column on small business technology for Time.com, and covered financial markets for 10 years, from the dot-com boom and bust to the 2007-2009 financial crisis. He holds a market analyst certification.

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