EMC targets BMC

Storage giant EMC has been secretly courting enterprise software company BMC Software with intentions to merge the two companies....

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."

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