EMC Creates Cloud Computing Division, Hires Former Microsoft Exec to Lead It; Oh, They Bought His Startup, Too

2/21/08Follow @wroush

There’s a term of art in journalism called “burying the lede.” It means taking the reader on a pleasant, diverting stroll for a few paragraphs before getting to the real news. That’s what Hopkinton, MA-based EMC (NYSE: EMC) did in spades in a late-afternoon press release today.

The announcement is ostensibly about EMC’s all-cash acquisition of a strange little Seattle company called Pi, which is working on an as-yet-unreleased software environment for creating, storing, and sharing personal information. The announcement goes on for a while about Pi and its 100 engineers in the United States, Canada, and India. Then, in the third paragraph, comes this little bombshell: “Upon completion of the acquisition, Pi founder and CEO Paul Maritz will join EMC’s executive management team as President and General Manager of the newly formed Cloud Infrastructure and Services Division.”

Well, as Bob told all of you just last week, the question was when, not if, EMC would soar into cloud computing. Cloud computing is a relatively new term that means offloading the software we’re accustomed to running locally and the data we’re used to storing locally to a collection of shared, indistinct, Internet-accessible computing resources. EMC executives have been dropping hints about the company’s interest in this area for months. We just didn’t expect that a formal move would come quite so soon.

And make no mistake: while EMC chose for some reason to dress up today’s developments as an acquisition announcement (and the Associated Press and other outlets have fallen for it), the real news is that EMC is bringing on Maritz to set the agenda for the company’s cloud entire cloud computing business. That includes not just the EMC Fortress SaaS infrastructure (see my story “EMC Gets Serious About Software-as-a-Service“) and the Mozy online backup service (see Bob’s story “Why EMC Bought Mozy: A Leading Exec Provides More Insight“), but also “other upcoming EMC cloud infrastructure systems and software offerings under development,” in the words of the release. Maritz will report directly to EMC CEO Joe Tucci.

It’s an interesting piece of executive recruiting. Maritz, who is approximately 53, was born in Rhodesia (now Zimbabwe) and spent fourteen years at Microsoft—rising to the position of vice president of the Platforms Strategy and Developer Group—before departing in 2000. While building Pi, which he started in late 2003, he’s also stayed involved in projects to assist the developing world; he’s chairman of the board of the Grameen Foundation, famous for its microloans to help poor women in places like Haiti and Indonesia set up small businesses.

The Pi website lacks the typical marketing mumbo-jumbo. Instead, its home page consists of an earnest essay by Maritz on “moving from personal computing to personal information.” The conventional tools for dealing with the digital detritus of our lives—from documents to e-mails to photographs to calendar appointments to tax returns—”are no longer up to the task,” Maritz writes. He envisions a future information system where familiar Web metaphors such as searching, subscribing, aggregating, sharing, and publishing are applied to all of our personal information, and where we have full access to and control over that data on any device, with the information automatically organized according to the task at hand.

Maritz is hardly the first high-profile IT executive to confront the challenge of personal information overload. Mitch Kapor, founder of Lotus, has spent the better part of a decade on the Chandler Project, an open-source personal information manager built around e-mail and small group collaboration. But Maritz’s solution at Pi, which was funded by New York private equity firm Warburg Pincus, has a uniquely “cloudy” spin. Pi’s software and services—which will be available for pre-release testing “soon,” according to the company website—will provide round-the-clock access to personal information by “replicating it across machines and devices,” according to the company’s site, with replicas residing on users’ own devices or “automatically set up on Pi hosting services providing 24×7 high-speed availability and strong security.” Sure sounds like the cloud to me.

EMC surely wanted someone with Maritz’s passion and breadth of vision to lead its cloud computing effort. But there’s reason to believe that the company also feels some sympathy with Maritz’s focus on individuals (as opposed to the organizations EMC is accustomed to serving). When EMC’s public relations officials sent us their press release today, they said the company wouldn’t have much more to say, beyond the content of the release. But they did point us toward a personal blog post by Chuck Hollis, EMC’s vice president of technology alliances and a 12-year veteran of the company. And Hollis has a great deal to say, some of it pretty remarkable, given EMC’s history as a company focused on expensive storage hardware for big companies.

“While most of the discussion around information management has been in the context of corporations and organizations,” Hollis writes, “the bet here is that the discussion will evolve into a new focus around us as individuals in the information society. And, let me be clear, we’re all going to want to manage—and control—our digital lives. [Emphasis in original.] Enter Pi Corporation.”

Hollis goes on:

“I’ve been dropping hints like crazy that something was up in this space, but I guess now it’s pretty obvious—we’re taking this shift in the industry very, very seriously. This ain’t just PowerPoint talking here….We’re saying that success in this new space will require a very different technology base—and a business model—very unlike other parts of the traditional IT landscape.”

Hollis’s argument is that even beyond Pi, Mozy, and the Fortress platform, EMC has a range of products relating to the vision of cloud-based personal information management, such as home storage based on EMC’s LifeLine offering, data security resting on RSA’s encryption technology, and collaborative workflows built around the company’s Documentum software.

“Like a diamond being set into a ring by an expert jeweler, Pi is potentially the centerpiece of a very intriguing strategic play,” Hollis concludes. “At the heart of it, EMC is all about information. And in a world where the majority of information is being created by individuals, we think what’s important is going to change.” [Again, the italics are in the original.]

So, what EMC is telling us, though they’re still being a bit coy and indirect about it, is that the world should be adjusting its picture of the company. No doubt, it will continue to sell networked storage devices, server virtualization software, content management systems, and data protection software, and it will continue to work with lots of Fortune-1000-caliber customers. But it also wants to be one of the companies that ushers in the era of personal cloud computing.

And when you think about it, who’s really out there articulating the same vision? Microsoft? Too busy getting Vista to work on PCs. Yahoo? Too busy trying to avoid assimilation by Microsoft. IBM? Its vision of “autonomous computing” was cool, but it seems focused today on becoming the world’s main vendor of IT consulting services and business middleware. More likely, the competitors that EMC is gradually lining up in its sights are Google and Amazon—two companies that definitely understand what happens when you put the emphasis on information and think of computing as a utility (i.e., there when you need it, but not the point of your existence).

“Pi’s technology is very complementary to our emerging cloud infrastructure strategy,” Tucci said in EMC’s announcement. “Paul Maritz and his team will provide invaluable vision and leadership as we position EMC at the leading edge of cloud computing and personal information management.” Speaking in my role as an editor and metaphor policeman, I’m not so sure that a “cloud” can have an “edge.” But I’d take Tucci’s position statement quite seriously.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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