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Houston-Based BMC Software Hands Off Data-Storage Line to EMC Corp.

Posted on: Wednesday, 2 July 2003, 06:00 CDT

Jul. 2--Houston-based enterprise software company BMC Software Inc. will hand off its data-storage software customers to Hopkinton-based storage company EMC Corp., in another sign of ongoing consolidation in the data-storage industry.

BMC will drop its Patrol line of software for managing large-scale corporate data-storage systems, and instead become a reseller of EMC's rival Control Center product line. EMC will license the BMC software and provide ongoing maintenance and support for existing Patrol customers, while helping them eventually migrate to EMC's software. Financial terms of the deal were not disclosed.

Doug Pushard, BMC's vice president for corporate development, said his company had decided in February to get out of the storage software business and focus its efforts on software to help executives better manage their firms' computer infrastructures.

"We had to make some decisions about where we were not going to invest so we could invest in the areas we were going to need," Pushard said.

Bill Nelson, senior vice president of open software business operations for EMC, said it made sense for BMC to hand off its storage operation to a company that specializes in the business.

"We're invested in storage," Nelson said. "We cannot only keep pace with what's required to remain competitive in this industry, but clearly lead it."

Steve Duplessie, senior analyst for Enterprise Storage Group Inc. in Milford, came away impressed after both companies briefed him on the deal.

"I think it was good for both of them, but I think it's really good for EMC," Duplessie said. "BMC has 5,500 really high-end customers that EMC can latch onto."

EMC, the leading maker of high-end storage hardware and software for mainframe computers, is striving to become a dominant force in "open systems," the company's term for large networks running Microsoft Corp.'s Windows operating system, as well as the many variants of the Unix operating system. These non-mainframe accounts represent a segment of the data-storage market that is growing faster than the mainframe business.

According to Duplessie, EMC has had difficulty translating its mainframe prowess into success with open-systems customers.

Under the deal with BMC, the company will gain a foothold in this market by gradually moving former BMC customers to EMC's product lines. "If you can't take advantage of that, you don't need to be in this business," said Duplessie.

EMC has acquired nine companies since 2000, with special attention to storage software firms. In April EMC bought Astrum Software Corp. of Charlestown, a privately held storage resource management software firm. Last year, it acquired San Diego storage software maker Prisa Networks Inc., and in 2001 it bought Belgian software firm FilePool NV.

The goal is a full complement of software to allow customers to manage large data-storage networks made of equipment from EMC and from competing makers of storage hardware, such as IBM Corp. and Hewlett-Packard Co.

Nelson said that the massive expense and effort involved in creating and maintaining storage software products ensures that the business will be dominated by a handful of large firms.

"I think there is going to be a consolidation in this space," Nelson said. "It is becoming increasingly complex to manage. It is about focus and investment, to do it and do it well."

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(c) 2003, The Boston Globe. Distributed by Knight Ridder/Tribune Business News.

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