EMC is buying back up software maker Dantz Development for "less than $50m".
The company produces Retrospect software, also included in Maxtor's One Touch external back up disc, and has a vital hold on the small and medium-sized enterprise market. It also has a retail and IP arm and a back up patent that may prove useful.
The $50m (£28m) price tag is low in EMC terms. It paid $1.3bn for Legato in 2003 - 26 million times more than Dantz' price tag.
Legato Systems' Networker is already a highly successful back up product for EMC. Networker is popular in enterprises but less so in the smaller enterprise space where Veritas Software's Backupexec and Computer Associate's Brightstore take the laurels.
EMC could easily produce an SME version of Networker by disabling some functionality and altering the packaging. It also has a great potential route to the smaller enterprise market through Dell.
However, Dell is not the only channel and it takes time to establish a new product in a new market. It is faster to ride into the market on a ready-made product.
Dave DeWalt, executive vice-president of EMC's software group said, "Dantz helps EMC methodically enter the SME software market and hit the ground running."
The smaller enterprise back up and recovery market is growing strongly, and is sized at $600m. The whole smaller enterprise market is a strategic one for EMC (witness its sale of cheaper disc arrays, such as the AX100, through Dell).
DeWalt said, "Dantz is a strategic acquisition in line with EMC's strategy to extend our reach and focus on the fast-growing SME market of next-generation high-growth customers."
In that case, the $50m for Dantz could prove to be a bargain. With Dantz, EMC has gained a ready-made SME backup product with a good track record and a working channel, through which it can hope to sell Legato and Clariion products.
It also gains its first toehold in the retail channel and, another first, in the Mac market as Dantz has Apple versions of its products.
Disc-based backup is becoming increasingly popular amongst SME customers and EMC now has a strong presence. EMC also has three traditional backup product lines: Legato and Networker; Dantz and Retrospect; and the ADIC tape libraries which it recently added.
We can expect it to start adding integration links and an ILM umbrella to these three lines. It also believes Dantz's technology and patents, along with EMC's disc-based backup and recovery, will form the foundation for Recovery Management, which it predicts will be the next major wave in backup and recovery.
Dantz has at least one patent relating to the back up of just new and/or changed information to avoid wasting space.
Veritas and Computer Associates International now face the certainty of much stronger competition. CA is going through management woes and its future is unclear. For both Veritas and CA though, questions might now be being asked about the wisdom of being software-only storage suppliers.
Chris Mellor writes for Techworld.com