21 December 2004 Storage giant EMC is set to buy network software maker System Management ARTS (Smarts) for $300 million, according to reports.
According to the Wall Street Journal, EMC will reaffirm its hunger for acquisitions shortly by confirming a deal for Smarts, thought to be worth in the region of $300 million. It is thought EMC wants to adapt Smarts’ network monitoring technology for storage systems.
Such a deal would represent a sizeable premium on a company with annual revenues of $60 million, and highlight EMC’s determination to extend its portfolio.
Like other storage vendors, EMC is faced with the commoditisation of its core hardware devices, with the accompanying shrinking of margins.
Its response has been to embark on an acquisition spree. It acquired VMWare, an Intel-based virtual computing software company, in January for $625 million, information storage provider Documentum in October 2003 for $1.7 billion and Legato Systems in July 2003 for $1.3 billion
The latest deal would bring its total spend on software companies to $4 billion in the past 18 months. Security giant Symantec has announced a $13 billion tie-up with storage software maker Veritas; 3Com, the networking vendor, bought security company TippingPoint Technologies for $430 million last week; and Oracle finally got rival PeopleSoft in an acrimonious $10.3 billion takeover.