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EMC rumored to buy backup service provider

Beth Pariseau

EMC Corp. would neither confirm nor deny reports that it is set to acquire Berkeley Data Systems Inc., which sells Mozy and MozyPro online backup services.

EMC's CEO Joe Tucci

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has stated publicly that EMC is looking to have a services offering in the backup space before the end of this calendar year. So far, no such offering has been announced. At the time of the announcement that EMC was looking to get into backup services, Tucci was coy with Wall Street analysts that wanted to know if it would necessitate yet another acquisition. "How much we'll develop ourselves or with our partners, and how much of this we'll 'jump start' by doing a small acquisition, we still want to keep to ourselves right now," he said.

Reports surfaced Monday that a deal has been made, but representatives from both companies are playing things close to the vest. "We would love to talk more about this," said Devin Knighton, director of public relations for Berkeley Data Systems. "But I have strict marching orders to direct [inquiries] back to [EMC director of public relations] Michael Gallant." Gallant did not return calls seeking comment as of press time, but another EMC spokesperson said the company is "declining comment on rumors and speculation related to acquisitions."

Mozy began as a consumer backup product but launched a service meant for businesses in December. By February, the company was claiming that more than 2,500 users had signed up for the service, most of them running the software on laptops and desktops. In April, SearchStorage.com heard from one small and medium-sized business (SMB) user, architectural firm, Strahan Associates, which had switched to MozyPro from Arsenal Digital Solution's ViaRemote service. By May, MozyPro had let slip that General Electric Co. had signed a big contract for its services, dumping Iron Mountain Inc. in the process.

Analysts said that if EMC has in fact acquired the company, the service's popularity with low-end customers, combined with its pedigree in high-performance computing on the backend, would make it an ideal choice, as EMC has been struggling with some of its backup and recovery offerings in the low end and midmarket. "[Berkeley's CEO and founder] Josh Coates has a history of building out massively parallel storage systems, and that's what's allowed him to build out the Mozy service," said Bob Laliberte, analyst with the Enterprise Strategy Group (ESG).

"The indication we've been getting as this space takes off is that it's very much an SMB play -- even large accounts, like GE, are using services like this to backup laptops. The enterprise play for a lot of online backup has been remote offices, which look a lot like SMBs," he said.

A hot market -- And getting hotter

Symantec Corp. joined EMC earlier this year in announcing plans for the online backup and Software as a Service (SaaS) space. IBM also announced last week that its Lotus email will now be offered as a hosted service, including archiving services for e-discovery and regulatory compliance. And every day it seems new startups are coming out of the woodwork as venture capitalist funding pours into this market. Newcomers, like Intronis LLC and Nirvanix Inc., are betting they can offer better, more targeted services to users than the first generation of SaaS storage offerings, like Amazon's S3. Yahoo announced it will be taking on Google with hosted email as well, after it acquired open source email startup Zimbra Inc. for $350 million.

And that was just last week. This week, two more announcements have been made pertaining to hosted backup services. Another startup that's come out of stealth, iForem, announced the launch of its iNuity backup service. IForem's calling itself a "storage safe deposit box" and said it places a calculated amount of funds from each sale of its service into an irrevocable trust, meant to assure the company's storage systems will be kept running if it goes under. IForem is also coming to the market with a "pay once" pricing scheme that grants users permanent capacity in the company's digital vault and requires no monthly subscription fees to maintain.

Meanwhile, a more established hosted service player, Seagate Technology subsidiary EVault, is trying to stay ahead of the newcomers to the market with a refresh of its InfoStage software. The update includes support for post-process data deduplication in EVault's storage repositories; a plugin for "hot" document-level backups of SharePoint servers and support for file-level or system-level backup of virtual machines.


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