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EMC Gobbles Legato

After months of rumored acquisition talks between the two companies, EMC Corp. (NYSE: EMC) today announced that it plans to buy Legato Systems Inc. (Nasdaq: LGTO) for $1.3 billion in stock (see EMC to Acquire Legato for $1.3B and Legato Up for Sale?).

The deal will vault EMC into the backup software market, where it will run headfirst into the leader in the category, Veritas Software Corp. (Nasdaq: VRTS) (see our report on Data Protection).

"I'm 100 percent convinced that the next big thing in storage software is information lifecycle management," said Joe Tucci, EMC's president and CEO, on a conference call with investors today. "There is no company that has more of the pieces than EMC and Legato." [Ed. note: And just two years ago, when it unveiled its Automated Information Storage strategy, EMC was convinced the next big thing was multivendor storage systems management. Maybe data backup is the bigger next big thing?]

Legato is the tenth software company EMC will have acquired since the beginning of 2000. However, EMC bought those other nine software companies largely to speed up its time to market in specific segments. With Legato, according to Tucci, EMC gets more than just technology and products: It will obtain Legato's base of more than 31,000 customers, as well as a support staff of 500 personnel and a "fully baked channel partner program" with 400 partners.

Tucci did add, though, that Legato offers a strong technology heritage with 450 [fully baked?] software engineers: "I'm sure we'll get an additional healthy dose of software DNA," he said.

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