ronutz
← Alla leverantörer

Vendor lineage

EMC Corporation

Made storage a category of its own, then became the largest technology acquisition in history.

EMC was incorporated in Massachusetts in August 1979 by Richard Egan and Roger Marino, whose initials are the E and the M. It began selling memory boards and became the company that made enterprise storage a purchase decision in its own right rather than something bundled with a server.

The strategy was unusual and deliberate: persuade customers to choose storage independently of who supplied the rest of their infrastructure. That is why EMC ended up selling into IBM, HP and Sun accounts alike, and why 'best of breed' became a phrase storage buyers used.

It bought heavily. Data General in 1999, largely for the CLARiiON array line, which is how one of the first minicomputer companies ended up inside a storage vendor. Documentum and Legato in 2003. RSA Security in 2006, which put a security business inside a storage company. VMware in 2004, for $625M, which turned out to be the most consequential of them all.

Iomega followed in 2008, later rebranded LenovoEMC through a 2013 joint venture that dissolved when Dell arrived.

In 2016 Dell acquired EMC for $67B, the largest technology acquisition ever recorded at the time, forming Dell Technologies. The VMware stake EMC had bought for $625M twelve years earlier was a substantial part of what made the price sensible.

Founding stories

1979

EMC

Massachusetts · Founders: Richard Egan, Roger Marino

Two former Northeastern roommates, 43 and 40, quit their jobs in August with no product and no plan, and began by selling office furniture to fund whatever came next. They became Intel's New England representatives the following year, and built their first real product in 1981 on a customer's suggestion: memory boards for Prime minicomputers, more reliable than Prime's own and at half the price.

The C in EMC is generally attributed to Connolly and Curley, two participants who left early - which is why the name outlasted them and the initials no longer decode.

The timeline

  1. The first product

    64-kilobyte memory boards for Prime Computer, sold on reliability and price against the manufacturer's own. The business for its first decade was extending the life of machines other people had built.

  2. Symmetrix

    An Integrated Cached Disk Array: many small disks behind a large cache, presented to a mainframe as storage. Before it, storage was an afterthought that arrived with the computer - a single large expensive disk, chosen by whoever sold you the mainframe. By 1991 this one product was 38% of revenue.

  3. The memory business is shut down

    Having built the company on memory boards, Egan discontinued them to concentrate on disk arrays. His co-founder said publicly in 1994 that at the time he could not understand why anyone would kill such a profitable line, and that he had come to see it as superlative timing.

  4. Past five billion

    Annual revenue above $5B, on a product category the company had largely invented as a category.

  5. Data Domain, then Isilon

    $2.1B for deduplication and $2.25B the following year for scale-out storage - buying the two architectures that were displacing the one it had built.

  6. Dell

    $67B, financed with roughly $50B of newly issued debt, and Dell took an 81% stake in VMware with it.

Flagship products and solutions

  • SymmetrixThe high-end array that made the company, and the reason a storage purchase became a separate decision from a server purchase.
  • CLARiiONThe midrange line, sold where a Symmetrix was more array than the customer needed - which is the segmentation problem every high-end vendor eventually has to solve.
  • Data Domain and IsilonDeduplication and scale-out file storage, bought rather than built, addressing two things the monolithic array was structurally bad at.
  • VMwareNever a storage product, and never integrated into one. It was held rather than absorbed, which is unusual enough to be the reason it kept its value.
  • RSAEncryption, tokens and identity - a coherent argument about protecting data and an awkward fit alongside array engineering.

Key innovations

  • Making storage a purchase in its own rightBefore Symmetrix a mainframe buyer took whatever storage the mainframe vendor sold. Building an array that outperformed those options and worked with all of them turned a bundled component into a competitive market - which is the single largest thing this company did, and it created the category every other vendor on this timeline sells into.
  • Many cheap disks behind a large cacheThe insight was that an array of small commodity drives with enough cache in front could beat a single large expensive one on speed, resilience and footprint at once. It is the same argument that later produced RAID everywhere, arriving as a product rather than as a paper.
  • Killing the profitable businessDiscontinuing the memory line in 1991 while it was still making money is the decision the company turned on, and the co-founder's admission that he opposed it at the time is worth more than any strategy statement. Most companies on this timeline that failed did so by defending a profitable line one year too long.
  • Buying the thing that ate youData Domain and Isilon were bought because deduplication and scale-out architectures were undermining the monolithic array. VMware became the most valuable thing the company owned. An incumbent that buys its own disruption early enough gets to keep the customer; the record of this timeline is that most of them buy too late.

Main markets

Enterprise data centres, mainframes first and then open systems - the organisations for whom storage is a line item large enough to have its own procurement. Revenue passed $5B by 1999 and the company was the reference against which NetApp, HDS and IBM's storage divisions were measured.

Its position rested on being independent of the server vendors, which is what made 'best of breed' a phrase storage buyers actually used - and which ended when it became part of one.

Analyst standing

  • For roughly two decades it was assessed as the leader in enterprise storage without serious argument, and the interesting question was always which competitor was gaining rather than whether EMC was ahead.
  • The closing verdict is arithmetic. A company built on memory boards for other people's minicomputers became a $67B acquisition, and a substantial part of that price was a virtualisation company it had never made part of its own product line. The best investment a storage company ever made was in software that had nothing to do with storage.

Acquisitions

  1. 1999 Data General

    One of the first minicomputer companies, bought largely for the CLARiiON storage array line.

    • 1968 Data General is founded (origin, not a purchase) — Founded by ex-DEC engineers; it defined the minicomputer market before ending inside a storage vendor thirty-one years later.

    The mid-range array business.

  2. 2003 Documentum and Legato

    Content management and backup software, bought in the same year.

    The software half of what became the EMC federation.

  3. 2004 VMware $625M

    Server virtualisation, bought before virtualisation was a category most buyers had a budget line for.

    By 2016 a large part of what made a $67B price for EMC sensible. The most consequential purchase EMC ever made.

  4. 2006 RSA Security $2.1B

    Encryption and authentication, which put a security business inside a storage company.

    RSA, later divested.

  5. 2008 Iomega

    Consumer and small-business storage.

    Rebranded LenovoEMC through a 2013 joint venture, dissolved when Dell arrived.

EMC Corporation ↗
From the company

This company no longer trades under this name. Now part of Dell Technologies.

Sources