Why EMC Bought Mozy, Part 2: The Consumer As Enterprise
The home consumer is a far cry from a big corporate enterprise, but each one of us can be seen as a mini enterprise.
That was the big revelation I took away from a recent interview with Jeff Nick, EMC’s chief technology officer. We spoke about many things, but I was particularly curious to ask about the company’s October acquisition of Utah-based Berkeley Data Systems, owner of online-backup service Mozy. EMC, after all, is about large enterprise customers. Mozy mainly targets the home consumer—so how deeply was EMC pushing into the consumer front?
Nick turned that question on its ear by talking about what he sees as the increasingly enterprise-like evolution of home consumers when it comes to handling information, including vital personal information, and how EMC saw this trend as a major opportunity for the company down the road. The distinction between the enterprise and consumer realms is breaking down, he said, “The lines are fundamentally blurring.”
Nick’s take on Mozy is actually the second one I’ve gotten from an EMC exec. In October, I sat down with Mark Lewis, president of EMC’s Content Management and Archiving Division, the corporate arm that will absorb Mozy. In that conversation, Lewis emphasized that while Mozy, with some 400,000 consumer customers, did give EMC a “footprint in the home,” people shouldn’t forget that it also had 8,500 (now 10,000) business customers, including a big deal with GE to back up all 350,000 desktops and laptops across the company. It was the business PC market—not just in big corporations, but also with small and medium-sized businesses—that EMC would probe first rather than the home consumer, Lewis said. “Is Mozy for PC backup? Absolutely.” he said. “But it doesn’t matter whether those PCs sit in a Fortune 500 company or my house.”
Now, back to Nick. I met with him at Boston’s Museum of Science, during EMC’s big industry analyst meeting. What he said was completely consistent with what Lewis had told me. But as CTO, part of his job is to think farther down the road than a business division head—so I wanted to ask him about EMC’s longer-range plans for the home consumer. That’s how we got to discussing the idea that tapping the consumer market wasn’t just about EMC moving into the home, it was about the forces driving the home user into enterprise turf—and what a business opportunity that could be for EMC. “This is personal information management brought into the IT world, and we need to bridge that gap,” Nick said.
First, Nick noted that the majority of information creation now comes from outside the enterprise (meaning, I take it, from smaller businesses and at-home computer users). Even just within the home, Nick said, think about the kinds of data that are now stored digitally: family photos, games, music, and all kinds of personal and financial information. If you lose the contents of your home PC (or iPod, these days), and it only holds photos and games, that hurts, Nick said. But, he added, “if you lose your personal account information, your financial data, your health records, your legal data, those things hurt a lot.”
For enterprise customers, EMC specializes not just in data storage but in providing back-up, encryption, and other forms of protection during storage and transmission, as well as archiving and indexing services to make it easier and more efficient to access and manage that information. Right now, though, most of home data isn’t backed up or protected. Little of it is classified or organized for future reference. Not only that, but we are increasingly sharing our personal information with others through electronic means—and much of what we send is also vulnerable. Especially as society becomes more digital, Nick said, “we need to be able to securely share information about ourselves—and we want that vital information to be protected and backed up and secured and archived.” So, for consumers, he added, getting “enterprise-class quality of service…it’s a much bigger deal now.”
Home consumers don’t want to be buying and supporting stacks of sophisticated software and small server farms. But EMC will be happy to do it. And it sees services like Mozy, which relies on a low-cost “software as a service” (SaaS) business model, as an early step toward that evolution: customers download a small desktop application onto their computers’ hard drives that monitors key files or folders and automatically uploads copies to Mozy’s servers at pre-scheduled times. “Capabilities like software as a service can be transformational,” Nick said, adding, “This is why I see, Joe [CEO Joe Tucci] sees, the inevitability of personal information management being a core part of information infrastructure.”
In the not-too-distant future, you can bet that EMC will be offering home consumers more sophisticated, enterprise-like storage and information management services via this same model. As Nick said about Mozy, “That’s just the tip of the iceberg of personal information management.”