EMC to buy Pi for personal info management

Posted on February 25, 2008

RssImageAltText

By Kevin Komiega

—When EMC acquires a company, it is usually a cut-and-dried proposition. The company's typical modus operandi is to identify a vendor with real-world products and an established customer base—Documentum for document management, Legato for backup and recovery, RSA for security, and so on—snatch them up and integrate their technology into the EMC portfolio. However, the latest acquisition bucks that trend and seems to be based on the potential market for personal information management rather than on a proven product.

EMC recently announced it has signed a definitive agreement to acquire Seattle-based Pi (Personal Information) Corp., a privately held developer of software and provider of services for personal information management.

EMC's vice president of technology alliances, Chuck Hollis, commented on the acquisition in his blog: "Everyone is free to come to their own conclusions regarding this particular acquisition by EMC, but I for one see this as signaling yet another shift in the technology landscape—one whose impact probably won't be blatantly obvious for some time."

Hollis explains that the bulk of new digital information will be created by individuals and not by organizations. "The natural corollary is that—if the vast majority of information is being created by people like you and me—we're going to want to have a decent level of control over our information."

Hollis admits that the value of the Pi acquisition will be hard to quantify "by most traditional standards." The company is not shipping products and did not have much in the way of funding from venture capitalists. It seems EMC set its sights on Pi based on its personnel and its ideas on information management.

Hollis continues: "From what I can see, they were just a bunch of incredibly smart and successful people who thought that the world was changing, and they could play a key role. I haven't seen their stuff running yet, but I'm under the impression that it's very, very cool."

Pi presently employs about 100 engineers and develops software and online services to enable individuals to control how they find, access, share and protect their digital information. Pi is in the process of beta-testing its first products.

The acquisition of Pi also serves as a launching pad for a new business unit within EMC. Pi's founder, CEO and former Microsoft executive Paul Maritz, will join EMC and head up the new Cloud Infrastructure and Services Division.

Reporting to Joe Tucci, Maritz will continue to oversee development and operations for Pi, along with other elements of EMC's cloud computing strategy, which include the Fortress SaaS infrastructure, the Mozy online backup service, and other upcoming EMC "cloud" infrastructure systems and software offerings under development.

Pi will operate as an independent subsidiary of EMC and will continue expanding operations in its Seattle headquarters and other offices in Montreal, Canada, and Bangalore, India.

Hollis concludes: "Like a diamond being set into a ring by an expert jeweler, Pi is potentially the centerpiece of a very intriguing strategic play. And one that not too many people will initially appreciate, I believe."

Tony Prigmore, senior analyst and managing partner at the Enterprise Strategy Group, says the Pi acquisition is similar to EMC's acquisition of server virtualization vendor VMware.

"Like the VMware acquisition, this acquisition is in an area of the market where most have not yet realized the potential of the market segment," says Prigmore. "EMC is placing a bet that is going to accelerate their growth in the fastest growing segment of the data management market and give them diversification of revenue at the same time."

Prigmore does not expect EMC to detail its product plans until early next year, but he says the company is well-positioned to develop a full service portfolio for consumer data management.

"The Cloud Infrastructure and Service Division at EMC includes things like Mozy and other homegrown technologies that we will learn more about as the year goes on," says Prigmore. "The group will benefit from a lot of leading-edge development that EMC has been spending the last couple of years on and will enable EMC to put some of the pieces of the puzzle together."

The acquisition of Pi will be an all-cash transaction and is expected to complete in the first quarter of 2008. On a GAAP basis, EMC currently expects the acquisition of Pi will be dilutive by $.01 per diluted share in 2008. No further details of the transaction have been disclosed.


Comment and Contribute
(Maximum characters: 1200). You have
characters left.

InfoStor Article Categories:

SAN - Storage Area Network   Disk Arrays
NAS - Network Attached Storage   Storage Blogs
Storage Management   Archived Issues
Backup and Recovery   Data Storage Archives