following is an excerpt from today's NYT on the EMC-DGN deal that you may find informative. (i've also provided a link to the piece below; free, but requires registration.)
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Analysts said the acquisition fit EMC's strategy of broadening its product offerings away from the mainframe market to embrace a broader range of customers -- primarily those that run network servers and other midsize computer systems. Although Data General's financial results have suffered in the last two years from tactical miscues and management issues, analysts said the company's products remained strong and would benefit from EMC's more robust sales structure.
"Data General has been going through a major program during the past year to beef up their direct sales activities," said Jim Porter, an analyst with Disk Trend, in Mountain View, Calif., noting that the company had previously sold most of its storage products to computer systems manufacturers rather than to users.
"Direct sales is an EMC specialty, so this is going to make a fundamental change in how Data General does business," Porter said.
The merger brings together two of the largest technology companies in Massachusetts, with EMC based in Hopkington and Data General in Westboro. Along with the Digital Equipment Corporation and Prime Computer, Data General started the minicomputer revolution and helped spark the "Massachusetts Miracle" of the 1980's. Slow to catch the shift from minicomputers to servers, Data General lagged behind companies like the International Business Machines Corporation, Sun Microsystems and the Hewlett-Packard Company in the 1990's but built a strong franchise in data storage.
The acquisition allows EMC to broaden its market much more rapidly than it could by developing its own line of midsize storage devices, Michael C. Ruettgers, EMC's president and chief executive, said in a telephone interview.
"They've been selling Clariion for some time now, so it is a fairly well-known product in the marketplace," he said. "The reason it hasn't been more successful is it never had all the software to make it more useful. We have that software. And, more importantly, we have the largest direct-selling storage sales force in the world and the best storage service organization in the world."
Ruettgers said the pooling-of-interests structure of the acquisition made it impossible to spin off the server business for the next two years. But he added that EMC was interested in applying Aviion's NUMA technology, a method for having multiple processors use a common supply of memory, in its storage management products.
"The only other company that had that technology was Sequent, which was just acquired by I.B.M.," he said.
Porter of Disk Trend said that Data General had been a pioneer in moving its product line from storage devices that send and receive computer data over the small computer systems interface, or SCSI (pronounced SKUZ-ee) channel, to a faster technology called fiber channel. But the company may have moved faster than its market, causing its storage sales to flatten in the last two years.
"They moved away from SCSI a little ahead of the pack, and this bold gamble did not pay off because they got there too early," Porter said. "But now, fiber channel is becoming a major part of the high-end market."
nytimes.com |
