EMC Gets Serious About Software-as-a-Service—Forms New Business Unit and Launches Enterprise Version of Mozy Online Backup

For the last few months, EMC (NYSE: EMC), the Hopkinton, MA, storage giant famous for selling big, expensive storage and backup servers to large corporations, has made no bones about its interest in a totally different model of doing business: Software-as-a-Service. Going with “SaaS”, as it’s called, is a major switch if you’re a hardware company, since it entails hosting your proprietary applications and/or your customers’ data on your own machines, providing access via the broadband Web, and charging for a subscription to the service, rather than for big iron.

Last October, EMC took an actual step in that direction by buying Berkeley Data Systems, the Salt Lake City, UT, company behind online backup service Mozy. And now it’s gone a step further, making SaaS an official part of its growth strategy. The company announced today that it has created a new business unit, EMC Software as a Service, with “MozyEnterprise” as the first product offering.

As executives Mark Lewis and Jeff Nick explained to Bob in separate interviews last fall, the original EMC-Mozy match made sense because the combined companies can bring enterprise-class backup services to consumers collecting ever-growing amounts of video, music, and other data. At the same time, they related, the new union helps real businesses avoid the cost and hassle of on-site backup by providing a heavy-duty version of the automatic, Internet-based backup service that Mozy has perfected for its existing customer base of nearly a million consumers.

The creation of EMC SaaS represents the flowering of the Mozy acquisition into a serious strategic gambit, potentially on a par with EMC’s move into the virtualization market through its 2003 acquisition of VMware.

Available starting today, MozyEnterprise is a version of the existing Mozy Pro service that’s been hardened for major organizations based on Mozy’s experience working with 10,000 existing business customers—including General Electric, which turned to Mozy to back up all 350,000 of its desktops and laptops. The new software installs itself on company-owned desktops, laptops, and remote Windows servers, then copies encrypted versions of each machine’s files to servers at EMC data centers over broadband connections. IT managers can oversee the backup process using a Web-based administrative console.

Roy Sanford, vice president of marketing and alliances for the new EMC SaaS business unit, says MozyEnterprise is just the first in what’s intended to be a substantial portfolio of EMC data services. “We’ve architected an infrastructure optimized for delivering common SaaS services such as multi-tenant support, security, access management, billing, metering, and so on,” says Sanford. “We’re calling that ‘EMC Fortress,’ and we’re building out a series of SaaS offerings on top of it, the first of which is MozyEnterprise for online backup and recovery.”

Over time, says Sanford, EMC Fortress will support online versions of EMC software applications as well. “We’re not going public with what they are just yet, but you can probably imagine just by looking at our 250-odd product offerings,” he says. It wouldn’t be too much of a stretch, for example, to conceive of subscription-based, Web-delivered versions of major applications such as EMC’s Documentum content management platform and its eRoom collaborative workspace environment.

Just by using MozyEnterprise, however, businesses will be able to tap into a range of EMC technologies, including security features engineered by its RSA division. “We’ve embedded enhanced security features from RSA into EMC Fortress, such as strong authentication, authorization for administrators, and key management for the encrypted datasets that are sent to EMC data centers,” says Sanford. “If you’re a home user, you can pretty much manage your own encryption key, but if you’ve got 10,000 or 100,000 keys, that creates a little bit more of a challenge—if you lose your key, your lose the ability to see your information. So key management is critical for larger organizations. We’ve also expanded support personnel to guarantee 24/7/365 phone and e-mail support.”

Sanford says customers who don’t have time to wait for terabytes of data to be transmitted over the Internet—a slow process even at broadband speed—can get started faster via “physical seeding.” That means shipping a hard drive directly to EMC, which will copy up to 2 terabytes onto its servers as the first backup. (Network engineers used to call this mechanism of physically transporting data on a fixed storage medium “SneakerNet.”)

MozyEnterprise will be available directly from EMC, or through private-label agreements with a number of resellers, including Verizon Business, TelX, eFileCabinet, and FusionStorm. When purchased directly through EMC, the monthly subscription fee for the service will be $5.25 per desktop or laptop plus $0.70 per gigabyte stored; for Windows servers, the monthly fee will be $9.25 per server plus $3.25 per gigabyte. Sanford says those prices represent a savings of up to 30 percent over the total cost of conventional on-site backup and recovery systems. But even more than the savings, corporate users may appreciate the convenience of an automatic, off-site backup process that can be managed by a single administrator through the MozyEnterprise web interface.

Wade Roush is the producer and host of the podcast Soonish and a contributing editor at Xconomy. Follow @soonishpodcast

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