VARs: EMC's Legato Buy A Big Channel Play For Storage And Content

Solution providers that work with both vendors, such as Atlanta-based Dimension Data and Waltham, Mass.-based Cambridge Computer Services, said that the synergy between the two vendors will make it easier to work with storage clients.

"There's a tremendous amount of integration required between backup recovery applications and storage infrastructure, so by having EMC acquire a leader in that area strengthens its ability to offer a complete solution," said Marc Duvoisin, national director of enterprise servers and storage at Dimension Data.

The consolidation of the two companies will help make the integration of different products easier and faster, Duvoisin said.

In particular, EMC will benefit from Legato's backup recovery solution, he said. EMC currently has the EDM recovery product, but it was suitable only for niche solutions. "Legato's products are more broad-based," he said.

More importantly, the Legato acquisition could bring more service opportunities to solution providers, Duvoisin said. "EMC doesn't have enough professional service staff to deliver these larger applications, so they are going to look at companies like Dimension Data to provide those services," he said. "I think we'll get more business because we have a strong relationship with EMC."

When choosing which Legato products to keep in the new EMC line card, Duvoisin urges EMC to keep the hierarchal storage management software Legato recently acquired from OTG. "That area is going to grow significantly," he said, particularly as the government tightens requirements around e-mail processing and archiving.

Duvoisin also believes the Legato acquisition will help EMC fulfill the company's mission of providing software that works in heterogeneous environments.

Duvoisin also thinks consolidation within the storage software market is good for the channel, up to a point. "This isn't a massive consolidation we're seeing, so if EMC is in fact moving toward a heterogeneous model, it could be good for the channel," he said. "Look at HP and IBM. They have a whole suite of offerings, but they still have very strong channel programs."

For Cambridge CEO Deena Berton, the acquisition is much more than EMC getting Legato's NetWorker backup application.

"Everyone is focused on NetWorker because it's Legato's flagship product, and it's a great product," Berton said. "But Legato also has its content management product line. The 'secret sauce' is in combining EMC's resources behind the very strong product family that Legato has."

Cambridge has been a Legato partner for 10 years and just recently started working with EMC's Centera line of arrays aimed at the fixed-content storage space, said Berton. "We see tremendous synergy with our [Legato] EmailXtender practice," she said. "The fact that Legato will be a part of EMC will move the synergies along and make the solution that much more compelling."

Scott Pelletier, storage practice manager at Denver-based Lewan & Associates, agreed that EMC will get more traction from the OTG side of Legato, which focuses on e-mail and instant messaging archival, than from the NetWorker side.

The acquisition will also have an impact on other vendors that recently moved into the content management side with the help of Legato, said Pelletier. He specifically pointed to StorageTek, which has had an OEM relationship with Legato for some time, and to Hewlett-Packard, which signed such a relationship just last month. "It will be interesting to see what happens there," he said.

Steve Pazol, president of Professional Consulting Services, a Chicago solution provider that has worked with both EMC and Legato in the past, said he feels EMC's main reason for buying Legato is its sales force.

That raises the question of whether EMC will increase its direct-sales efforts and sidestep the channel, Pazol said. "EMC has a strong direct-sales model and it's putting a ton of money behind its software play," he said. "So you have to wonder what's going to happen to Legato's channel."

Despite EMC's attempt to allow its hardware and software products to work in heterogeneous environments, Pazol believes the third-party vendors that integrated Legato's products might have to find a new software partner. "Legato is probably no longer a neutral player," he said.

Berton at Cambridge disagreed, saying that Legato is becoming a part of EMC should not affect her company's ability to compete in heterogeneous environments against hardware-independent software vendors like Veritas Software and Computer Associates International.

"There's precedent in the industry," she said. "Look at Tivoli and IBM. If EMC's stated goal is to run Legato independently over time, there's no reason customers cannot accept Legato software. Certainly with IBM customers, Tivoli is a compelling sell. But Tivoli certainly has had a strong standing as an independent product."

Lewan & Associates' Pelletier said the acquisition, just like HP's purchase of Compaq did last year, will make it easier for channel partners. "Folding one competitor into another simplifies my life as a reseller," he said.

Because Lewan & Associates currently works with Veritas and not Legato, it can be difficult to bring EMC into an environment where the customer prefers to work with Legato, said Pelletier. "Since we are a big EMC partner, combining EMC with Legato enables us to work with Legato customers without switching them to another vendor's software," he said.

Not all solution providers looked positively on consolidation in the storage management space.

"I don't see consolidation helping the typical VAR--because you're losing some bullets in your gun because when a competitor gobbles up someone else's partner, that partner no longer has preferred standing." Pazol said. "There's less of a choice in the channel and more chance for EMC to go direct."