From Information WeekWe probe about the Documentum buyout, its implications for the storage and content-management markets, and how it's likely to affect customers. With its pending acquisition of content-management firm Documentum Inc., EMC Corp. will become one of the world's largest software vendors. EMC, which bought Legato Systems earlier this year, saw a need to create a more diversified business that could solve a wider array of customer problems. Establishing stronger links with software used to create and manage content is logical. EMC CEO Joe Tucci, who engineered the deal, was at Documentum's user conference in New Orleans last month to fill customers in on the reasoning behind the acquisition.
InformationWeek senior editor Tony Kontzer discussed with Tucci the buyout, its implications for the storage and content management markets, and how it's likely to affect EMC's and Documentum's customers.
Here are some highlights from the interview:
As we watch information built--and of course that information needs to be stored, protected, and accessed, and a whole range of other things--the majority of that information that's being created is what we call unstructured data--data outside the database. We recognized that the needs of this information were fundamentally different than that which the industry had grown up on, which was the structured data under the control of the database.
If you look at our revenue mix, we are 50% hardware, 25% software, and 25% services. If you looked at the services piece, that's software maintenance--pure maintenance, no professional services whatsoever--you'll see that we have $2.2 billion in software revenues. That's a huge software company.
So, if you look at where the bulk of R&D is going, more than 75% [went to software] before Legato and Documentum, north of 80% after Documentum. On the software side, we're spending 20% of revenue on R&D, and, overall, we're spending 12%. That doesn't look like a hardware company. Hardware companies do not spend 12% of revenue on R&D. We're dedicating ourselves--and Documentum gives us a perfect piece of this--to what we call information-life-cycle management.
...if you look at our definition of storage, it's the back-end network which we call SAN [storage-attached networks]. There are different ways to access data, whether it be through NAS [network-attached storage], through the SAN itself--direct attached--or through objects which we call CAS--content-addressed storage. We have the software that manages the movement and replacement of data. </CMSWire>