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Did EMC Overpay?

So much for EMC avoiding any blockbuster acquisitions.

EMC CEO Joe Tucci probably regrets the "string of pearls" description of EMC's acquisition strategy he made earlier this month at analyst day. (See EMC Nets nLayers, Scopes Security and EMC Acquires nLayers.) The analogy referred to smaller companies EMC has been gobbling up to complete its storage portfolio as well as expand into network management and services.

Tucci has also cautioned against big deals in the past, saying they present great product and corporate integration hurdles. That was the EMC mantra when Symantec consumed backup software giant Veritas last year. (See Vulnerable Veritas.)

So Tucci had some explaining to do Thursday after EMC said it would pay $2.1 billion for RSA Security. Analysts pressed him hard for justification during a conference call, and EMC's share price plummeted today in reaction.

Tucci said the opportunity was too good to pass up. He hinted that an EMC rival was also hot on RSA's trail, driving up the price and urgency of the deal.

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