Updated at 2:30 p.m. PDT with comments from Iomega Chief Executive Jonathan Huberman.
And now for something completely different.
Software and storage company EMC announced Tuesday that it will purchase Iomega for $213 million, or $3.85 per share. EMC expects the deal to close sometime during the second quarter of this year.
EMC has traditionally played in enterprise-level storage and software arenas. Iomega is best-known for hard drives and storage for consumers and small-business customers. EMC hinted that this is just its first move into consumer hardware business.
"Iomega will play a key role in EMC's strategy to expand our information storage and management capabilities deeper into the high-growth consumer and small business markets," EMC Chairman, President, and Chief Executive Joe Tucci said in a statement.
Iomega says the acquisition by the larger EMC will enable the company to grow in a way that it currently cannot. "Our markets are adjacent, but not overlapping," Iomega Chief Executive Jonathan Huberman said in an interview with CNET News.com Tuesday. "We have strong brand and channel presence in business and consumer (markets), but what we do lack is scale."
Iomega earned $336 million in sales in 2007, while EMC did more than $13 billion in sales worldwide last year.
Once the acquisition is complete, Huberman will lead the newly minted consumer/small-business products division in EMC's storage platforms group. The division will be built completely around Iomega people and brands. Huberman said no decisions have been made on possible staff cuts at Iomega. "But the expectation is that this is about growth," he said. "The vast majority will be coming into the new organization."
Huberman said a major opportunity for his company at EMC is to take advantage not only of its scale and channel partnerships, but its intellectual property, particularly in the area of networked storage products.
EMC has been on anacquisition tear during the last few years, most recently snapping up Pi, a cloud-computing start-up.
A few years ago, servers based around Linux and Intel or Advanced Micro Devices chips decimated the market for high-end Unix servers.
The same thing is about to happen to in the storage market, says John Fowler, executive vice president of systems at Sun Microsystems. And this time, Sun hopes to be one of the beneficiaries of the trend, not one of the victims.
"Open storage is going to be one of those big changes events for that part of the industry," he said. "The storage marketplace is almost identical to the server market of 10 years ago. High-end storage arrays have proprietary hardware, proprietary silicon, and often proprietary silicon sold at very high margins."
Sun's John Fowler
(Credit: Sun Microsystems)Incumbents like EMC and Network Appliance, however, won't likely give up easily. NetApp and Sun, in fact, are embroiled in a nasty lawsuit over Sun's ZFS file server, which Sun believes will play a crucial role in lowering the price of storage. And, truth be told, Sun has tried for years to break into the upper echelons of storage for years with middling success. In 2005, it spent $3 billion for StorageTek.
Still, standards often have a way of winning. The forces driving the change in the storage market are multicore processors, interfaces like SAS (Serial Attached SCIS) and open-source (or at least easily available) software. Standardization will cause storage systems to drop rapidly in price, Fowler said. Instead of being confined to centralized computing rooms, departments are going to be able to buy their own data storage units.
"It will be like the PC revolution," he said.
A shift toward open storage systems is already occurring in high-performance computing environments and research labs, Fowler said. Large Web sites and huge data centers shouldn't be too far behind, he predicted. Sun's initial foray into open storage was the Sun Fire X4500, a server with a lot of storage capacity, running OpenSolaris and ZFS.
As the price drops, hardware makers will also experiment with adding features on higher end machines. Sun, for instance, is working on a system that contains a cache of flash memory for rapid data access. It will function in a similar way as a hybrid hard drive, but, because it is a complete storage system built from several drives, it will have more capacity.
Although storage isn't the kind of topic that can usually perk up a dinner party, large companies are also dedicating more research and development to storage these days. Faster memory devices and complex file systems are some of the primary avenues of research at IBM's Almaden Research Center.
"The problems we're looking at aren't computationally driven per se, but more information management problems," Mark Dean, an IBM fellow and director of the Almaden Research Center, said in a recent interview. "Computation is not the hard part anymore."
At Sun, co-founder and chief computer architect Andy Bechtolsheim spends a substantial amount of his time on storage issues.
Standards is the new mantra at Sun. During the '90s, it raked in billions in revenue in selling Solaris servers with UltraSparc chips. Former CEO Scott McNealy used to talk about how there was a battle between Microsoft and the rest of humanity (with Sun being the defender of humanity.) Sun would sell some servers with Intel and AMD chips, but not enthusiastically.
When the dot-com crash hit, several of the start-ups that Sun sold gear to ended up selling the expensive machines they got from Sun on eBay. Now, Sun spends its time trying to woo customers with MySQL, the open-source database Sun bought. The strategy now is to convince customers that Sun can assemble standardized components and software better than others.
Besides, "EMC versus the rest of humanity" doesn't have much of a ring to it.
EMC on Thursday said it will acquire Pi, a cloud computing start-up founded by former Microsoft executive Paul Maritz.
Financial terms of the all-cash transaction were not disclosed.
Maritz will join the storage company as president and general manager of a newly created Cloud Infrastructure and Services division.
Privately held Pi, which has about 100 employees, is now beta-testing an online personal information management service (Pi stands for "personal information").
The software Pi is working on is designed to let people control, share, and publish information that is online or locally stored, according to the company's Web site.
EMC said that Pi will fit into the company's "cloud infrastructure" strategy. Cloud computing is the idea of building and running applications that run on the Web and are delivered as a service.
"We're saying that success in this new space will require a very different technology base--and a business model--very unlike other parts of the traditional IT landscape," wrote Chuck Hollis, EMC's global marketing chief technology officer, in his blog.
Cisco Systems said it will pay $150 million for a small stake in a virtualization software company called VMware, which operates as a unit of storage giant EMC.
Cisco's stake in the company will be about 1.6 percent. VMware is the leader in what is turning out to be a hot market. The division makes software that allows a computer or server to function as if it were several. The software emulates features of a computer, which makes it easier to run multiple operating systems and applications on a single machine. Companies benefit because the software allows them to use more computing power out of individual computers and servers. It reduces the number of new machines they have to buy, which can often provide huge capital savings as well as operational savings, especially in reducing energy costs.
Analysts say that VMware has about 85 percent market share in the virtualization business at the moment. The market is expected to grow to about $20 billion annually in the next few years.
VMware is so hot now that EMC is preparing to spin off 10 percent of the unit in an initial public offering. EMC reported on Tuesday that VMware grew sales 89 percent to $298 million in the second quarter compared to the previous year.
Earlier this month, Intel agreed to invest $218.5 million in VMware. Meanwhile Microsoft, the largest potential rival to VMware, is gearing up to challenge the company. But Microsoft has already postponed the public beta version of its main product that is supposed to rival VMware's software. It's expected to be out in the second half of this year.
Cisco, which primarily makes switches and routers that shuttle IP traffic around networks, is interested in VMware because it will help Cisco's corporate customers run their data centers more efficiently. Once the deal is complete, Cisco will have less than one percent of the outstanding voting stock in the company, but VMware has agreed to consider naming a Cisco executive to its board once it goes public.
As we head into the dog days of summer, most technology announcements are lukewarm at best. Usually vendors save their juicy stuff for September and the push toward the end of the year.
With that as a back drop, one announcement last week may have been a curious exception to this rule. Cisco, EMC, and Microsoft got together with a few others and announced the Secure Information Sharing Architecture (SISA). What is SISA? The press release defines it as a "commercial off-the-shelf architecture that was created to make data easily, and securely shared among multinational environments."
Pretty vague, I know but in reading between the lines, SISA seems to be the beginning of a multi-vendor architecture that blends the best of Network Access Control, user authentication, network directories, and enterprise DRM. Combining these technologies could make it easier to enforce business policy rules without getting mired in multiple layers of technology. Want to add a new consultant to a project? SISA provides a framework that would streamline user provisioning, security enforcement and rights management. Mapping business initiatives with security policies gets a whole lot easier.
So will it work? Sounds good but this initiative hasn't lead to market ga-ga like the iPhone announcement. The architecture needs a lot more clarity and the group needs more participants. What about IBM's participation for document and identity management? Where is Oracle and Adobe? How about the Trusted Computing Group's Trusted Network Connect? MIA so far.
It's too early to tell whether SISA is a passing summer fling or the real deal. But Cisco, EMC, and Microsoft are definitely on to something here. We need better standards and frameworks to consolidate access controls, privacy, and security up and down the technology stack. Next-generation business processes depend upon this happening. SISA may or may not become real but I guarantee that something resembling SISA eventually does.
EMC is selling 10 percent of VMware stock in an initial public offering, the company announced Wednesday. However, EMC has no plans to spin off the virtualization specialist, it noted.
"VMware is one of the fastest-growing businesses in the history of the software industry. We expect the IPO to unlock more of VMware's value for EMC shareholders while also strengthening its ability to retain and attract the software industry's top talent," EMC Chief Executive Joe Tucci said in a statement.
VMware's virtualization software lets a single computer run multiple operating systems at the same time, a task useful for consolidating work onto a smaller number of more efficiently used servers. The company has been moving gradually toward higher-level software for managing this virtual infrastructure.
EMC acquired VMware in January 2004 for $625 million, but has operated it as an independent but wholly owned subsidiary.
VMware showed off some of the fruits of its Fusion project to bring its virtualization software to Apple Computer's Intel-based Macs on Tuesday at the Macworld show in San Francisco.
The software lets Linux, Windows, Solaris and NetWare operating systems run in compartments called virtual machines on Apple systems, a feature handy for using software not available on Apple machines or for programmers or testers who need to use multiple products.
The final version of the software will ship in the summer, at which point VMware will announce prices, the company said. The beta version is freely downloadable from the EMC subsidiary's Web site.
Adobe Systems, whose design software is used on Apple and Windows machines, is one company trying out Fusion. "My team maintains a vast library of VMware virtual machine images for developing and testing our software products, and because many of the engineers involved are Mac users, the ability to leverage our existing library was a compelling reason to evaluate the product," said Blake Garner, an Adobe lab systems engineer, in a statement.
VMware, the market-leading virtualization software for x86 computers, released a new beta version of its Workstation 6 software that includes support for Windows Vista.
An announcement to customers last week said Vista can now be used to host other virtual machines using VMware's virtualization software. Virtualization lets multiple operating systems run on the same computer, which can be handy when, for example, older applications won't run on a new operating system.
According to the release notes, the Workstation 6 beta also lets the software use multiple monitors, either with one virtual machine spanning multiple monitors or different VMs on different monitors.
The beta also is integrated with debugging features in Microsoft Visual Studio and the open-source Eclipse programming tools. Also for programmers, the new Workstation can be controlled by scripts that automate testing.
Other features:
• Paravirtualized Linux kernels, such as those for the open-source Xen virtualization software, will run in virtual machines.
• Files and directories can be copied via drag-and-drop between Windows and Linux hosts and guest VMs running Linux, Windows and Solaris.
• VMware Worksation's previous limit to 4GB of memory for all virtual machines has been removed. Individual VMs now may have up to 8GB each, and the total is capped only by how much memory is in the computer.
• Battery information is reported to guest virtual machines.
VMware, an EMC subsidiary that that once had the x86 server virtualization market to itself, released on Friday a technology preview that helps bridge a divide with open-source rival Xen.
Virtualization lets multiple operating systems run on the same machine, a technology that can increase server efficiency. Paravirtualization is related, but in comparison offers higher performance and requires that an operating system be explicitly adapted to the virtualized foundation on which it's running.
VMware's virtualization foundation thus far employs full virtualization, while Xen and an upcoming alternative from Microsoft code-named Viridian employ paravirtualization. VMware's preview technology lets paravirtualized operating systems run on VMware's foundation, the company said.
Currently, the software supports only 32-bit versions of Linux, and USB doesn't work.
EMC is likely to acquire business partner Network Intelligence next week for a price between $170 million to $175 million, a source familiar with the plan said.
Beyond the initial acquisition price, a further payout could elevate the price as high as about $250 million if the company meets future financial goals, the source said. The company's annual revenue is about $20 million to $25 million, the source said.
Network Solutions sells software that converts a company's data into a form useful for audits and regulatory compliance. It already has a partnership with EMC, whose Centera storage system can be used in archiving such data. EMC has been on an acquisition spree, buying several software companies to expand beyond its original storage system specialty.
EMC declined to comment, and Network Intelligence didn't respond to requests for comment.
