EMC acquires Legato Systems

EMC’s Canadian operation Monday said it will be taking over Legato Systems Inc.’s worldwide support centre with 250 employees in Burlington, Ont. as part of its US$1.3 billion acquisition of the storage software company.

The two companies confirmed rumours that had been circulating since early

this year with the deal, which will see Mountain View, Calif.-based Legato become a software division of Hopkinton, Mass.-based EMC. While EMC became known for its high-end storage hardware, it has increasingly invested in software as an additional source of revenue. As part of the long-term integration plan, EMC said it will combine the best elements of Legato’s back up and recovery product, NetWorker, with its own Enterprise Data Manager (EDM).

In a conference call to discuss the transaction, EMC chief executive Joe Tucci said Legato was the first of the nine software firms it has acquired which boasts 500 distribution and support representatives and a “”fully baked”” channel partner program with 400 active resellers.

Legato’s Canadian resellers include Montreal-based DigiDyne, which not only provides first-level support but also training to Canadian Legato customers. Ivan Berkovits, DigiDyne’s president, said the company has already been trying to calm any concerned channel partners.

“”The e-mails (from Legato) to date are showing that they’re going to be pretty much business as usual,”” he said. “”They’ll be left on their own, the name stays, the product line doesn’t change.””

Legato Systems has a second Canadian office in St. Laurent, Que.

EMC Canada, meanwhile, recently said it would consolidate its two Toronto-based offices into a single location this fall as part of a restructuring that saw the appointment of a country manager, Ross Allen, and the formation of commercial and technology solutions groups.

Allen said the full details of the Canadian EMC-Legato integration probably wouldn’t be worked out until the deal is finalized in the fourth quarter of this year. He said the Legato product line would allow EMC resellers, which make up close to 50 per cent of its Canadian sales, would add more value to the product sale.

“”We’re trying to do a whole lot more of that,”” he said.

Berkovitz, meanwhile, said DigiDyne had been approached by EMC to join its partner network, but so far it has held off.

“”Frankly, I think there are so many storage vendors,”” he said. “”People are all clamouring for your attention. Well, now I guess we’re going to have to pay attention.””

David Wright, the Legato chief executive who will be joining EMC as a vice-president, said the acquisition would provide Legato with some much-needed credibility in the enterprise.

“”When customers start to make these enterprise decisions, we spend a little time talking about the financial situation at Legato,”” he said. “”That just takes the decision off the table.””

Tucci said Legato would help EMC fill out gaps in its product set. EDM, he said, possesses only two per cent of the backup and recovery market. He said the company will be looking to the “”Tivoli model”” whereby IBM kept the sales force of its Tivoli management software unit separate as a rule of thumb during the integration process.

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Jim Love, Chief Content Officer, IT World Canada

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