* EMC buys SMARTS for management expertise
As the year closed, EMC bought network management vendor SMARTS. Here’s why.
For $260 million, EMC acquired engineering talent that has an understanding of several useful technology areas. SMARTS products fall within three general categories: business services management, application services management and infrastructure management. It is in this last category that the most important synergies with EMC’s market plans are likely to appear.
A major part of SMARTS’ infrastructure management offering focuses on root cause analysis. We have commented many times in this newsletter and elsewhere about the value this sort of technology delivers – at its simplest, it enables analysis to focus on problems, not on the problems’ symptoms. From an IT manager’s point of view this means that when a fault occurs, problem-solving can begin with a single automated trouble ticket, and not with the blizzard of trouble tickets most of you see today. This leads to quicker problem identification and, quicker resolution.
Why would EMC be interested in this? Consider three important issues that are likely to drive EMC’s market direction during the next few years.
1) EMC is shifting from being a hardware company to being a company that derives most of its revenue from software and services. As hardware increasingly becomes commoditized the margins will lie in non-commoditized segments of the hardware market and in management software. EMC already attributes more than a quarter of its revenues to software, and has every intention of growing that number to 50% and beyond.
2) EMC, already a major player in storage management, is going to make a serious effort to upgrade its ability to manage all aspects of the storage environment. In complex environments, which are a large share of EMC’s market, this requires an ability to monitor all aspects of the IT system that impact networked storage. EMC has had no internal capability to do that until now.
3) EMC is looking beyond storage now, and is likely to try to extend its management capabilities across much of the rest of the enterprise. And of course, the more the company looks at becoming a utility computing vendor, the more necessary is the ability to be able to manage across the entire IT system.
EMC has always been a vigorous competitor. Don’t be at all surprised to see the company looking even further beyond its traditional markets as it ramps up to compete for the next few years.
Next week: Technologies to watch out for in 2005.
