EMC gets Smarts

Von Bob Francis

EMC Corp. on Tuesday announced it will buy privately held System Management ARTS Inc., known as Smarts, in a US$260 million deal that will boost EMC"s software portfolio and management capabilities.

Smarts is known for its InCharge real-time network systems management software. The company is expected to have fiscal 2004 revenue of about $60 million, according to EMC. EMC said Smarts will enable EMC storage management software to correlate, determine root-cause problems, and present action plans for critical problems in storage networks.

"The acquisition is about market expansion, innovative technology, and growth, Joe Tucci, CEO of EMC, said in a statement. "EMC is committed to dedicating the resources required to expand Smarts" current market presence, while also applying their world-class modeling, correlation and root-cause analysis technology to expand our lead in information and storage management," he said.

The deal extends EMC"s reach into the market for storage networks used to create pools of data storage to more efficiently handle storage and retrieval of corporate data. In the past couple of years EMC has added to software to its portfolio. In October 2003, for instance, EMC purchased Legato Systems for $1.37 billion. It recently acquired data storage company Documentum for $1.48 billion and software maker VMware for $625 million.

EMC has not been the only one in acquisition mode in the storage software market. Last week Symantec Corp. purchased Veritas for $13.5 billion.

EMC"s latest acquisition is expected to be completed in the 2005 first quarter and is not expected to have a material impact to earnings per share for the 2005 fiscal year, EMC said.