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Analysts Upbeat on EMC’s Smarts Buy

Storage vendor EMC Corp. continues its metamorphosis into a software company with another acquisition. Analysts said its Tuesday purchase of Smarts Inc. provides a long-needed enhancement to the intelligence of its core-event management and correlation technologies. Analysts said the move, the latest in EMC’s software acquisitions this year, may spark similar moves for intelligent storage […]

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thumbnail Karen Schwartz
Karen Schwartz
Dec 21, 2004
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Storage vendor EMC Corp. continues its metamorphosis into a software company with another acquisition. Analysts said its Tuesday purchase of Smarts Inc. provides a long-needed enhancement to the intelligence of its core-event management and correlation technologies.

Analysts said the move, the latest in EMC’s software acquisitions this year, may spark similar moves for intelligent storage management technology from its competitors.

“[EMC] needed to fill a hole in their product set,” said John Webster, senior analyst with Data Mobility Group of Nashua, N.H.

To bridge the gap, EMC ponied up $260 million for the White Plains, N.Y. developer of software that manages infrastructure, applications and business services. The software falls in the lucrative and growing event automation and network systems management arena, a market IDC said will reach $1.8 billion this year.

According to execs, Smarts brings several important technologies to EMC, most notably its InCharge software, which uses a library, based on the Common Information Model (CIM) standard, to describe the components of a customer’s infrastructure and business processes.

“The technology presents what is really happening in the environment, the topology view of where it’s happening, the application view of what it affects within the IT system, a dashboard view of the impact based on the interrelationships, and the business view of why it matters,” explained EMC vice president Howard Elias. “It’s that combination approach that allows you to take the appropriate action in an increasingly automated way.”

Read more here about the EMC buyout of Smarts.

To extend its reach beyond storage probably was the main driver for EMC’s acquisition, said Michael Karp, senior analyst with Enterprise Management Associates of Westboro, Mass. The company is continuing its push into the area of utility computing.

“It allows them to look at more of the overall enterprise—an absolute necessity if they are to be thought of as a key player in providing utility services,” he said.

The Smarts acquisition is a recognition by EMC that LAN/WAN infrastructure behavior will continue to impact storage-centric functions such as backup, replication, migration and even centralized management of distributed SAN (storage area networks) and NAS (network-attached storage),” noted William Hurley, a senior analyst with Enterprise Strategy Group of Milford, Mass.

EMC plans to integrate Smarts’ modeling and correlation technologies into its own offerings, eventually enabling EMC’s storage management software to intelligently correlate, determine root cause problems and present a plan of action for critical problems across the storage network, Elias said. Since the technology can gather events and apply the correlation technology to any component of the infrastructure—physical or virtual—it will be able to work well with the VMware Inc. virtualization technology that EMC acquired earlier this year, he noted.

Analysts said the integration of Smarts technology into EMC’s product lineup may make EMC’s software both more robust and a premier choice for managing centralized, heterogeneous storage. It could rise to become the “manager of managers,” essentially the master console in environments with legacy systems management products, Hurley said.

EMC’s acquisition of Smarts follows many others this year, including VMWare, Dantz Development Corp. and Allocity Inc. This rash of acquisitions, Hurley said, shows that EMC is working to solidify its base as a storage solution vendor that has designs on a larger footprint in the enterprise data center.

“VMware in particular is causing both customers and vendors to think differently about the IT ecosystem architecture and the management of this new model,” he said. “We see a strong complement between robust, centralized discovery, event correlation and service analysis and the adoption of virtualized infrastructure.”

Click here to read how VMware reduced server sprawl at faucet maker Moen.

According to Webster, the Smarts acquisition will cause EMC’s competitors—notably Hewlett-Packard Co., IBM and BMC Software Inc.—to sit up and take notice. “This could be powerful stuff when integrated with other storage network management tools,” Webster said.

Meanwhile, EMC’s move may spark EMC’s competitors to consider acquiring like functionality from companies such as Onaro Inc. of Boston, Mass. Any vendor that sees storage management as strategically important will be on the lookout for a likely candidate, Webster said.

The EMC deal is expected to close in the first quarter of 2005, officials said.

Check out eWEEK.com’s for the latest news, reviews and analysis on enterprise and business storage hardware and software.

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