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April 10, 2008updated 19 Aug 2016 10:08am

Any port in a storm: EMC buys Iomega

News broke yesterday that EMC, the daddy of the enterprise storage market, is buying Iomega, which does various storage offerings for consumers and small businesses. It’s the first time EMC has gone so far downstream - its Clariion storage arrays

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News broke yesterday that EMC, the daddy of the enterprise storage market, is buying Iomega, which does various storage offerings for consumers and small businesses. It’s the first time EMC has gone so far downstream – its Clariion storage arrays are midrange, but they’re still reasonably pricey pieces of kit.

So what’s the plan? Why does a company that has the upper echelons of the storage market so neatly sewn up want to pay $213m for a storage company that’s mostly a consumer/prosumer play?

My hunch is that it’s something of an insurance policy. As the US credit crunch starts to look more and more like the start of a recession, the firm is mindful that if enterprises tighten their belts, top-end storage arrays like its flagship Symmetrix and even its mid-range Clariion may not be a top priority.

Sure, there’s a certain amount of insulation in the sense that data volumes are still exploding, so there’s a limit to how much companies can pare back storage spending, but they could still try. The Symmetrix is akin to a Rolls Royce: the ultimate in protection and reliability. Companies could start going for a Mondeo until their budgets ease up a little, or they could switch investment to virtualization and de-duplication technologies that help them get more from their existing infrastructure.

So getting into the consumer and small business space gives EMC a little more diversified portfolio, which may even out some of the lumpiness it may see in its higher end accounts. The firm is creating a new division to house Iomega: it will form the core of EMC’s new Consumer/Small Business Products Division. Don’t be surprised to see EMC pick up some more consumer or small business storage or information management software technologies to flesh out this division further.

It’s not the first time EMC has remodeled itself. It started life selling memory, long before it got into storage arrays. After that it was a one-trick pony for a time, specializing in its Symmetrix line at the high-end. It changed its stripes again when it bought Data General to get its hands on DG’s Clariion mid-range boxes, and since then it’s also changed considerably by developing more of its own, as well as buying a range of software, such as Documentum, RSA and Network Intelligence.

So while investors may see EMC’s Iomega buy as a sign that EMC thinks its higher-end storage market is likely to provide less rich pickings going forward, perhaps that shouldn’t concern them too much. EMC is no stranger to reinventing itself, and it’s done pretty well so far, as it’s moved from storage, to information management, to secure information management.

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Maybe the higher-end is a little more saturated, and maybe competition from rival virtualization, de-duplication and commodity storage is hurting a little more than it was two years ago. But EMC may just be about to show the world how to sell storage and information management to consumers and small businesses. Observers have been wrong to write them off in the past, and they will almost certainly be wrong to write them off now.

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