EMC to Buy Configuresoft, Builds on Growth Strategy

5/28/09

EMC (NYSE:EMC) is upping its presence in the market for software to manage both physical and virtual servers in data centers, revealing yesterday that it plans to acquire existing partner Configuresoft for an undisclosed amount. Hopkinton, MA-based EMC says the buyout further advances its strategy to offer software for managing and servicing the computer servers and other equipment that together form the IT infrastructures of large organizations.

Configuresoft, based in Colorado Springs, CO, is a developer of software for managing and configuring both physical and virtual servers. EMC struck a deal with the 10-year-old firm last year to provide Configuresoft’s software to customers under the EMC brand. That agreement and the buyout deal both stem from EMC’s desire to help companies manage virtualization technology, according to Margaret Rimmler, vice president of EMC’s resource management software group. Virtualization enables single servers to run multiple operating systems and applications, or to consolidate multiple machines to run applications as though they were one.

“With the original [agreement] and now with the acquisition,” Rimmler says, “it solidifies the position of having a full suite of solutions for our customers in both managing the physical and the virtual [data center]—and we think the virtual part is increasingly important.”

EMC is, of course, the majority owner VMware (NYSE:VMW), a major provider of virtualization software for desktop computers and data centers. Yet while VMware’s products enable virtualization of servers, Configuresoft’s products provide companies with the ability to configure and manage those virtual servers automatically.

EMC, which expects to close the Configuresoft buyout in June, plans to continue Configuresoft’s operations in Colorado Springs and employ most of its 150 workers after the deal is done, Rimmler says. After the acquisition is closed, Configuresoft will become part of Rimmler’s resource management software group at EMC. EMC does not plan to continue operations at Configuresoft’s London office.

The Configuresoft buyout builds on EMC’s previous acquisitions and product development in the past several years to expand beyond its mainstay IT storage business, Rimmler notes. To name one of dozens of examples, EMC purchased privately held Smarts in late 2004 for $260 million to offer companies Smarts’ software for diagnosing problems in IT networks. The addition of Configuresoft brings this capability down to the server level.

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