EMC Buys Windows Expertise

EMC makes another services play, this one Microsoft-specific

January 10, 2006

3 Min Read
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EMC has moved to further bulk up service offerings by acquiring Internosis, a managed IT services firm that specializes in Microsoft environments. (See EMC Buys IT Services Firm.)

Internosis, of Greenbelt, Md., was founded in 2000 when its management team bought the Technology Services division of Corporate Software & Technology Inc. of Washington D.C. Internosiss 250 consultants and its management team will join the Microsoft Practice within EMC’s professional services organization, which is dubbed EMC Technology Solutions. Internosis CEO Robert Stalick will head the group as its VP.

The buy is part of EMC’s greater emphasis on services as it moves toward becoming more than just a pure-play storage company. It also underscores Microsoft's growing importance as an enterprise IT player.

“We spent a lot of time over the last year developing our long-term strategy for our services organization,” says Todd Pavone, VP of Global Solutions inside EMC Technology Solutions, who lists compliance and content management services as other parts of EMC’s M&A strategy. He says more acquisitions will follow.

Indeed, this is EMC’s second services-related acquisition in five days. Last Thursday, EMC paid $30 million for grid software technology from Acxiom Corp. that will initially be used for managed services. (See EMC Unveils Grid Gameplan.) EMC did not disclose the price of the Internosis deal.EMC has been offering Microsoft services for awhile, mostly in the form of design and help with Exchange and SQL Server deployments. EMC also has become more involved with Microsoft customers since acquiring Windows server virtualization startup VMWare two years ago. (See EMC Gobbles VMware.) In all, EMC's goal with the Microsoft services is to compete more effectively with rivals that sell servers and storage, such as IBM, Hewlett-Packard, and Sun Microsystems.

“I don’t think it’s enough for a storage vendor to only be a storage vendor anymore,” says analyst Charles King of Pund-IT Research. “EMC has been sort of sidling toward becoming more or less a systems vendor. It’s been creating ways for folks in the Microsoft market to come to EMC for server management software, including VMware and now grid tools.”

Pavone says EMC’s Microsoft Practice generates around $15 million a year. Internosis claims it had more than $40 million in revenue in 2005.

At least one IT services customer sees the logic of the acquisition. Luke Marvin, director of technical infrastructure at Internosis customer Analog Devices, was a bit puzzled by the news at first but says he understands EMC's strategy. Analog Devices, a semiconductor company, has used Internosis for four major IT projects since 2000.

"Initially I was surprised, but my sense is EMC is trying to grow up and be IBM and offer software and services," Marvin says. "They still have a ways to go to prove themselves, but this puts them on the road there. Now they'll be able to go into a company with a good deal of Microsoft expertise."— Dave Raffo, Senior Editor, Byte and Switch

Organizations mentioned in this article:

  • Acxiom Corp. (Nasdaq: ACXM)

  • Analog Devices Inc.

  • World Cellular Information Service (WCIS)

  • Hewlett-Packard Co. (NYSE: HPQ)

  • IBM Corp. (NYSE: IBM)

  • Microsoft Corp. (Nasdaq: MSFT)

  • Pund-IT Inc.

  • Sun Microsystems Inc.

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