EMC Has High Hopes for Consumer Play

SANTA CLARA, Calif. — EMC is the storage player of choice for many in the enterprise market, but the company has expansion plans that include consumers, “prosumers” (technically astute consumers) and small- and medium-sized businesses.

The key to gaining that market is Iomega, which EMC purchased in April for $213 million. Iomega is now “the cornerstone of the consumer and small business products division at EMC,” along with the LifeLine and Retrospect products, according to Jonathan Huberman, the former CEO of Iomega and now president of the Consumer and Small Business Products division at EMC.

Huberman’s pitch was part of a briefing here at EMC’s Silicon Valley offices to journalists and analysts. Consumer products are currently a $400 million business for EMC, and the company expects it to become a $1 billion business in the near future, “which gives you an idea of the plans EMC has for us,” said Huberman.

Huberman cited an IDC study that said 70 percent of data in the world will be created by individuals. “EMC, until they acquired us, was ceding that business to competitors and they didn’t want to cede it any more,” Huberman said.

Trends ahead for consumer and SMB storage, EMC (NYSE: EMC) said, include 30 percent unit growth, increasing home and cloud usage and a consolidation of the market — but continuing cost pressures to remain innovative.

To that end, Iomega and the other consumer divisions are looking to their $14 billion parent company to provide it with the scale, cost synergies, access to enterprise software and innovation to be utilized in its future products.

The foremost priority is focusing on ease-of-use, Huberman said. “Our end user is not the typical EMC user, like Allstate or American Express,” he said. “This is a law firm with 10 users, and they don’t have dedicated IT consultants except one guy who’s a jack-of-all-trades.”

EMC’s next generation of network storage for the SMB and consumer/prosumer markets will include enhanced data protection with automatic backup and scheduling and RSA encryption. They will also entail extensive content sharing to turn backup devices into a media hub, usable by everything from a laptop to an iPhone, and convenient interoperability to provide integration with entertainment devices.

A second speaker, George Lotridge, vice president of EMC’s Advanced Technology Solutions group and part of the company’s Office of the CTO, elaborated by discussing one particular project within EMC designed to appeal to these groups.

The effort, called Project Futon, centers on an intelligent, digital photo manager that will enable users to download pictures from their digital phone to local storage as well as an online storage service, like EMC’s Mozy service. Mozy, which EMC acquired in 2007, enables people to store vital documents on a remote server hosted by the company. It competes in a crowded field that includes Carbonite, HP’s Upline, Symantec’s SwapDrive and Fabrik, a start-up.

Pund-IT analyst Charles King said effort to focus on small business, consumers and prosumers makes sense for EMC. “What Iomega gives them is shelf space, because their products are everywhere,” he told InternetNews.com. “It fits right into their exploding digital universe strategy.”

King also noted that EMC is playing down the value of the hardware, an interesting strategy for a storage vendor. “The secret sauce is in the software. The new Iomega drives include EMC Retrospect automated backup software, and others have Mozy pro backup included.”

“What’s cool about that is you’ve got this standalone drive people are using for physical backup on the desk, and at the same time, you’ve got the tools to make a remote backup recovery site in the cloud,” he said.

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