EMC pays $153 million for Israeli software transplant Kashya

Stan Beer
Wednesday, 10 May 2006 17:23

IT Industry - Strategy

Data storage market leader EMC, which has been putting muscle on its software and services business for the past three years, has shelled out $153 million for California-based Israeli software company Kashya Inc.

The former Israeli based Kashya, founded in 2000, develops data-replication storage systems that can be used in disaster recovery situations, and is now headquartered in San Jose.

The acquisition by EMC follows its well articulated  strategy of developing the high margin value added software side of its business to complement its lower margin storage hardware.

EMC, is no longer a storage hardware company if one is to believe the latest top level revenue breakdown. While EMC still gets 46% of its revenue from hardware, 37% now comes from software and 17% from services.

Since 2003, EMC has acquired such diverse software and services companies as Legato and Documentum, information management software companies,  VMware, a software company specializing in Intel-based virtual computing software, and more recently, Smarts, a network management systems company.

“From 1991 until 2002, we were a storage company, from 2003 to 2005, we were an information management company and today we are an information infrastructure company," said Jordan Reizes, EMC director of marketing for Australia and New Zealand. "We’re looking for the right product mix that gives us unique value. Companies today focus on technology but our belief is that companies will in future focus on information rather than just the components of the IT stack. What’s stored is important not how it is stored. Optimising infrastructure is critical to reducing both complexity and costs. So you start to build a stack starting from the storage boxes right up to information management on top.”

The number and range of acquisitions over the past three years has pushed EMC into markets that involve competitors well outside the realm of storage. “Take Documentum, for instance,” said Reizes. “That’s a company that had nothing to do with storage; it’s information management. Last year, we acquired a small US company called Smarts, which does real-time network systems management.”

On the Kashya acquisition, Dave DeWalt, President, EMC Software Group, said, “Information protection is a chief concern for customers today. By combining Kashya’s rich portfolio of heterogeneous replication software with our industry leading virtualization and continuous data protection technologies, EMC is enhancing the market’s broadest set of capabilities for virtualizing and safeguarding the world’s information.

“Today’s acquisition expands our market and gives us key technology to extend our share of growing and strategic information infrastructure markets,” DeWalt added. “Beyond the complementary nature of its products and partner ecosystem with that of EMC, Kashya represents immediate technology infusion in the areas of storage virtualization, recovery management and heterogeneous replication while bringing key technologies to EMC for future development. Additionally, Kashya’s Israel-based R&D operation forms the core of the new, innovative EMC Israel Software Development Center, creating new center of excellence for EMC software development.”