EMC's Information Life-Cycle Management

Legato: Strategic Sea Change

Until 2003, EMC was true to its storage roots. Perhaps the company's most audacious move was to offer hardware with Fibre Channel and ATA drives in the same storage cabinet. EMC has been all about providing top-performing, high-capacity systems and charging a healthy premium for them. These acquisitions therefore signal a significant change: a move to an ILM strategy.

ILM's fundamental tenet is that the value of data changes over time, and that the software that manages data needs to account for its intrinsic value to the organization. Although this premise seems obvious, no data-management software addresses it well. To really provide ILM, EMC must deliver on virtualized storage (seamlessly moving data to various storage media without end users' involvement), and a major element of that is management, says Mark Lewis, EMC's executive vice president for open software.

Delivering on virtualized storage management only within the EMC product line will not be interesting to EMC's base of large corporate and institutional clients with heterogeneous environments, Lewis says. The last thing these customers need is to run more than one vendor's interpretation of an ILM system. That understanding led EMC to this buying spree, Lewis says. Legato brings a highly respected, heterogeneous portfolio of storage applications, with know-how in backup and restore, data replication and archiving, as well as specific applications for such things as e-mail data retention--a subject near and dear to most corporate legal counsel. Some of these more vertical applications overlap with Documentum's software, but all in all, Legato gives EMC what it needs. EMC's infrastructure software story now stands in contrast to that of Sun, HP and IBM, which support their proprietary systems first and add third-party storage support later, or depend on third parties to provide software like Legato's.

The Legato purchase will bring new customers and new sales channels to EMC. Lewis says that though R&D teams will be integrated (meaning Legato will take over the development of the few products that overlapped with EMC's original product line), Legato will maintain its management, sales, marketing and support staffing for now. That's a nod to just how little experience EMC has had selling through the channel--which may not bode well for any attempt to upsell Legato customers with additional EMC products, since EMC is so used to the direct sale.Furthermore, creating a consolidated software version will require EMC's or Legato's customer base to learn a new interface. Still, the Legato acquisition puts EMC in a good position against its complete-solution competitors. The challenge will be to let its software divisions remain truly hardware-agnostic.Documentum also fits well into EMC's ILM strategy, by providing an app-level component. A typical Documentum customer needs to retain, organize and secure data assets for specific reasons. That client also must organize its data for outside use. For example, pharmaceutical manufacturers must retain and prepare key development and testing documentation for FDA regulators to review; government agencies must retain their (virtual) paper trail to show how they've dealt with those they serve or regulate. Until now, EMC has never addressed this aspect of ILM.

Before the Documentum purchase, Centera was the centerpiece of EMC's ILM story. Centera is a low-level approach to assigning a time-dependent value to data. The product's "content addressed storage" architecture is thus intended to allow life-cycle access to generalized, unstructured content. As such, it does not provide the application-specific document management that Documentum can deliver, but it could provide the underpinnings for Documentum's apps.

EMC will need to walk a delicate line: Existing EMC customers such as Robert Terdeman, vice president and chief information architect at Rogers Communications, the Canadian media giant, are excited by the resources that EMC brings to Documentum.

"Our medical intelligence communications division was using Documentum at the time EMC made its purchase," Terdeman says. "Suddenly, Documentum went from start-up to reliable partner. That let us settle on Documentum as a standard."

Yet EMC will need to resist the temptation to make Documentum reliant on EMC technology. "We know Documentum has a lot of customers who don't use EMC storage products," Lewis says, "and we recognize that many of them value the flexibility that an open solution provides."Stiff Competition

Documentum's open quality is, in fact, a key strength against tough competitors. IBM has the best stake in the ground for full-service content management. Its Content Manager solution is in its eighth iteration and uses DB2 to organize references to unstructured data, an approach that's less open than Documentum's. The other large player in the low-level data-management game, Oracle, has set its Internet File System as the repository for all data, both structured and unstructured. It's likely that Oracle will purchase some Documentum competitor to stay on an equal footing with IBM and EMC.

Make no mistake: This is a large and growing market, with room for players of any size to maneuver. Technology-trends analyst IDC says the current $3.4 billion document-management market will grow to $8.3 billion by 2006. Congress has done much to boost the business of companies like Documentum. The Sarbanes-Oxley Act of 2002 and the efforts of New York State Attorney General Eliot Spitzer are causing companies to realize that unstructured content-management software will soon be universally necessary just to keep adequate corporate governance records. That shifts the document-management approach to a more centralized one.

Documentum is an excellent match for EMC because of its wide breadth of products and services. Many competitors organize Web documents or internal documents, or provide online functional team-management services (managing documents and meetings for functional teams working at the project level), but few provide all three. Lewis says Documentum will retain its own management, sales, marketing and support functions, like Legato. But Documentum's R&D staff will remain largely independent.Considering the size of the Legato and Documentum acquisitions--more than $3 billion--the purchase of VMware for a cool $635 million seems in many ways like an odd fit at an odd time. VMware makes virtual machine software that not only decouples Intel-based hardware from operating-system software, but also allows multiple-server OSs, including Linux, NetWare and Windows 2000, to run simultaneously on the same machine. Although VMware is profitable, its technology is still considered by most to be very forward-looking, whereas Legato and Documentum are tried-and-true warhorses of their respective businesses.

Nevertheless, customers are using VMware products in their production environment. "We use VMware's server-side product in two ways," says Tony Adams, technology analyst for agribusiness giant J. R. Simplot. "We use it for server consolidation and for rapid deployment of new applications." Adams points out that VMware has simplified the process of introducing new server-hardware platforms as well as new applications, and he sees the value that VMware brings EMC. "VMware's ESX product works best when used in SAN environments," he says. He notes that checkpointing and moving running applications between servers are practical only when storage has been centralized.Adams isn't particularly concerned that EMC will change the hardware and software agnosticism he finds central to VMware's appeal. "We use IBM storage systems and Veritas backup software, so I suppose it could be a concern, but VMware supports [storage products from] IBM, HP and Dell," he says. "It wouldn't be in EMC's interest to change that."

Indeed, as the deal closes, it appears that VMware chose EMC as much as EMC chose VMware. Other suitors such as HP, IBM and Microsoft hold parochial interests that fly in the face of VMware's core value. Microsoft seeks a Windows-only world, and HP and IBM like the tight coupling of OS and underlying hardware, believing they provide specific advantages with their hardware designs. VMware is said to have rebuffed offers from Microsoft at least; thus, it seems to have avoided the fate of competitor VirtualPC, which Microsoft purchased and then pigeonholed as a transition mechanism from one Windows version to the next.

VMware has unique value within EMC's ILM strategy. Running multiple-server OSs simultaneously is a neat trick, but it's not the product's key feature. Rather, VMware immensely simplifies software configuration by taking hardware nuances out of the equation. Once hardware is known to work with VMware, that equipment can run any VMware-compatible OS, and it need only be configured for the VMware virtual machine. After they're running, hosted OSs can be monitored, stopped and moved to other VMware servers without the OS knowing about it. That makes the job of data-center server allocation and management significantly simpler than it would be without VMware. The price paid for this convenience is some memory overhead on each server and some performance as well--not a high price to pay versus the dilemma of configuring and maintaining potentially hundreds of OS images.

With VMware in its stable, EMC says it hopes it can build a single framework that manages the virtualization of storage and servers throughout a data center while maintaining the open-platform stance of all its acquisitions. EMC's Lewis says VMware will be run as a wholly owned subsidiary; and that makes sense for two reasons. First, VMware's product is quite different from anything EMC deals with. Second, one of VMware's most valuable assets is its high-powered development team. The parent company needs to remain hands-off and not disturb VMware's development culture.

Not everyone, however, is completely convinced."We've used and been impressed with VMware," says Rogers Communications' Terdeman, "but we've also seen other EMC acquisitions like Data General get swallowed, never to be heard from again. So I think the jury is out on VMWare."

The Big Picture

The two biggest challenges for EMC in its quest to dominate data-center management systems will be the development of that single overarching virtualization-management system and the creation of enough professional-services chutzpah to compete with IBM and HP. Lewis recognizes this, and while emphasizing the independence of each software-house purchase, he also says that a single management platform is part of the big picture. Still, each of EMC's latest acquisitions has its own professional-services divisions, though of varying size and focus. EMC must knit together a cohesive worldwide force while servicing all the products it now owns. That's no small task.

HP, IBM and Microsoft have been in the general-purpose management software game a lot longer, and have yet to produce a whiz-bang management system that brings raves from customers. In some ways, EMC's task may be made easier by not having a legacy system to deal with, but the challenges are still daunting. The company's hands-off approach will help preserve the open nature of its software acquisitions, but will also complicate its ability to deliver on the holistic management piece of the puzzle that large institutional buyers are looking for. EMC has used its deep pockets to buy a seat at the table. Only time will tell how well it can play the game.

Art Wittmann is editor in chief of Network Magazine, our sister publication. Write to him at [email protected].0