EMC in Smart Management Play With $260M Buy

EMC joined an end-of-year acquisition spree among software makers when it agreed on Tuesday to acquire network management software maker Smarts Inc. for $260 million in
cash.

Should the deal succeed, EMC would join IBM , HP , Computer Associates
Cisco Systems and others as
providers of software systems that diagnose and manage changes in networks on the
fly.

Smarts InCharge software provides administrators knowledge about the
behaviors and characteristics of IT environments. For example, InCharge
automatically finds root cause problems, assesses their impacts across
technology domains, and presents admins with the fix to keep business
services running.

Mark Lewis, EMC Software EVP, said EMC became enamored of the Smarts
technology after fielding customer concerns about reducing network
complexity.

“The difference between Smarts and other report systems is that Smarts tells
customers what problems exist while others don’t tell the customer what’s
broken,” Lewis told internetnews.com. Lewis said Smarts can work
alone or as a complement to other management platforms, such as IBM’s Tivoli
line and EMC’s own ControlCenter storage management platform.

Such products are crucial ingredients of utility computing strategies for
companies who want to take the onus of network maintenance from human
engineers and put it on the software.

While EMC rivals IBM and HP use the software to provide services
on demand, EMC sees the Smarts purchase as a way to fortify its information
lifecycle management strategy for managing files from the time they are
created until they are ready to be destroyed. One of they key pieces of ILM
is uninterrupted data flow: Smarts can help deliver that, Lewis said.

EMC’s software business has grown considerably during the last two years. The
outfit accelerated its ILM pace by acquiring
archiving outfit Legato, content management provider Documentum
and virtualization concern VMware.

Smarts represents the next piece in the ILM puzzle.

Pund-It Research founder and analyst Charles King said the deal is
consistent with EMC’s broadening approach to IT management, focusing on the
convergence of data and storage networks.

“That makes sense for a couple of reasons,” King told
internetnews.com. “First, effectively dealing with the growing
complexity of IT infrastructures requires a more systemic approach than was
once the case. Second, as system vendors like IBM and HP have found
increasing success with a ‘whole’ system approach, specialists like EMC need
to find ways to compete directly with such solutions.”

Smarts, of White Plains, N.Y., is expected to reap $60 million in 2004
revenues. The company’s software can be deployed either stand-alone or
integrated with existing systems management frameworks.

EMC expects to consummate the purchase in the first quarter of 2005 and will
tuck Smarts into its software group, along with its 300 employees. Smarts
President and Founder Shaula Alexander Yemini will join EMC’s office of
the CTO.

The purchase is part of a year-end software shopping spree. Oracle’s $10.3
billion purchase of PeopleSoft was accepted
two weeks ago.

Last Thursday, Symantec topped all software purchases by agreeing
to buy Veritas Software for $13.5 billion. Analysts labeled
this deal a sure sign of the convergence of security and storage.

On Monday, Cisco moved to acquire network security gear concern Protego
Networks for $65 million. Cisco will use Protego’s security monitoring and
threat management appliances to pad its portfolio.

Clint Boulton
Clint Boulton
Clint Boulton is an Enterprise Storage Forum contributor and a senior writer for CIO.com covering IT leadership, the CIO role, and digital transformation.

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