The EMC Saas Business Strategy

EMC became interested in venturing into the Saas business because it knows it has many solutions in the backup and archiving field which may be evolved into Saas solutions as well. Basically, EMC wants the Saas solutions to serve as a complement for the low-end storage solutions EMC will also be offering. EMC is opting for these markets because in the past EMC did not serve the Saas and low-end storage markets effectively enough.

If EMC does manage to delve into Saas, it will have to fully address any pricing issues which have bogged down Saas initiatives in the past (particularly with regards to metering plus cost transparency issues.) The problem hinges on the fact that Saas pricing changes depending on usage.

The plan by EMC to venture into the Saas business seems to follow a business trend where storage solutions vendors are tapping into the Saas field as well, as part of their expansion efforts. Right now, EMC is the seventh-biggest player in the enterprise software business.

EMC recognizes that Saas is a competitive alternative to the traditional way that software has been developed and marketed. Usually, software was built up to be always licensed as a model which was beneficial to traditional software companies. Rather than deal with Saas a threat, EMC would rather consider Saas as a business opportunity presented to them to accept and develop further.

One way EMC has been able to enter the Saas arena is with its October 2007 purchase of Berkeley Data Systems which makes online backup service Mozy. This is also the path being taken by other vendors who are interested in competing in Saas.