Storage giant EMC has been secretly courting enterprise software
company BMC Software with intentions to merge the two companies.
Coupling EMC, one of the world's most successful enterprise storage
companies, with BMC, one of the largest independent software
companies, would make EMC a significant player in the datacentre
and application management market.
BMC's Patrol software framework is the jewel that EMC is chasing in
its merger talks with BMC, according to observers.
Over the past six months, EMC has been busy re-inventing itself as
enterprise storage software management company, evidenced by its
AutoIS initiative.
Adding BMC's technology to extend EMC's software management reach
into the application and database layers is a logical next
step.
"This is a growth sector for EMC. The whole Patrol framework is a
good framework for systems management. EMC wants that software that
tracks everything in the datacentre, from application servers, and
all the way down," said an industry source.
With technology hardware margins shrinking and becoming less able
to support revenues, EMC knows it must expand its software and IT
service offerings going forward.
EMC is not alone here. A recent wave of partnerships and software
news from competitors including Hitachi and Fujitsu show an
ever-increasing desire by large technology companies to mimic the
success of IBM's Global Services.
"EMC is absolutely hell-bent on becoming a major software player in
the industry," said Arun Taneja, senior analyst at Enterprise
Storage Group.
"Everything we've seen over the last three or four months is very
heavily centered on software. So would it surprise me if they go
through some major acquisition in the marketplace? Absolutely not,"
Taneja added.
However, like Hitachi and Fujitsu, EMC faces an uphill climb in its
attempt to challenge IBM's leadership in software and IT
services.
"The challenge is, if you are a hardware manufacturer, I can't
think of anybody who's gone from hardware to being a great software
producer," the source said.
"IBM built Global Services organically. It is very hard in services
to buy your way to catch up to IBM. You are essentially buying
people and your best assets go home everyday, so you get stuck in
this mode where you need to do something transformative. It's very
hard to roll up services companies."
But Taneja said that an acquisition of BMC by EMC would put the
storage company on the fastest track to getting what it
wants.
"BMC is known for its application centricity. So if EMC got a big
jump by getting an application specific software such as BMC and
building up from that, it certainly could make sense, and it's a
quick way to get there."