Iomega may add glitz to EMC

EMC + Iomega = competition for Apple, says Jerome Wendt

What a difference a week makes. Earlier this month, Iomega's board rejected EMC's takeover bid and was planning its own acquisitions. A week later, Iomega was making plans to join the EMC family. So now that it appears Iomega REV and EGO hard drives will be sold alongside EMC Clariion and Symmetrix storage systems, will small businesses and consumers buy into what EMC is selling?

The answer to that question depends on EMC, whose acquisition of Iomega should help ensure the survival of Iomega's different product lines. But how many small businesses and consumers care about product longevity and permanence is questionable even when it comes to data storage. In these market segments, glitz and flash are more important than boring and reliable.

Buying Iomega might be exactly what EMC needs to spruce up its staid consumer storage image. Product names like "REV" and "EGO" certainly resonate with consumers much more than "MozyPro" or "Retrospect".

The phenomenal growth occurring in the consumer storage space also should drive storage sales as people store more audio and video to larger portable storage devices. I only need to look at my son's iPod and its 80GB of storage to understand that, though it is Apple's storage not EMC's that he uses.

If anything, this puts EMC in more direct competition with Apple, which is problematic. EMC clearly understands how to sell into environments that support mission-critical data. That mindset commands a premium in the business space, but it remains to be seen whether EMC can adapt its business model to satisfy the more fickle consumer storage space.

EMC is buying its way into the consumer space. However, buying Iomega is not enough for it to compete, since EMC needs to convince more than just me to buy its consumer storage products — it also needs to win over my son.

Jerome Wendt is the president and lead analyst at DCIG. You may read his blogs at www.dciginc.com

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