EMC to buy software firm for $1.3 billion

Storage systems maker EMC said Tuesday it will buy Legato Systems in a stock deal valued at $1.3 billion.

EMC will purchase Mountain View, Calif.-based Legato for its storage management software. This is the latest in a string of deals that expands EMC's storage systems management software portfolio. EMC, based in Hopkinton, Mass., bought Astrum Software in April for its storage management software. Storage management software, which helps companies that buy EMC hardware handle their data, is becoming an important point of differentiation between EMC and its storage rivals, which include Hewlett-Packard, Hitachi, IBM and Sun Microsystems.

Legato's products include backup and recovery applications that give companies the ability to archive data such as e-mail. While storage hardware can be improved by increasing its data capacity or by beefing up components to prevent failures, management software that allows different types of hardware to work together or that makes data more accessible is often what wins customers because it helps companies gain a return on their storage investments.

"This combination is all about improving the access, management and protection of an organization's core asset-information through its complete life cycle," Joe Tucci, EMC's CEO, said in a statement. EMC will pair its own software with Legato's, Tucci said. The deal may create a wrinkle for HP and others that have licensed Legato software. The $1.3 billion value affixed to the deal is based on EMC's closing price of $11.74 on Monday. Under terms of the agreement, Legato shareholders will receive 0.9 of a share of EMC's stock for each share of Legato stock.

News source: C|net

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