EMC to offer Web hosting service

By Jim Finkle

BOSTON (Reuters) - EMC, the world's top provider of corporate computer storage hardware, has teamed up with Germany's SAP AG to deliver computer programs over the Web, a senior SAP executive said on Wednesday.

The tie-up reflects a push by Massachusetts-based EMC into a much-hyped new area of technology known as "cloud computing" that centralizes computing and storage functions at data centres, and allows people with PCs or laptop computers and Web access to tap vast stores of information from afar.

The companies will use virtualization technology to deliver that software to customers, Doug Merritt, president of SAP Labs North America and a member of the SAP Executive Board, told Reuters in an interview.

He did not discuss specifics of the collaboration.

In a virtual environment, companies install software on machines at one data centre and workers use inexpensive computers equipped with software that allows them to run the software remotely.

Companies save money because technicians can perform maintenance from a single location, saving them the trouble of accessing equipment sprawled across the company. The technology makes it easier for companies to move operations in a natural disaster.

Merritt also declined to comment on the financial details or say when the venture will be launched.

An EMC spokesman would not comment on the venture.

THE FUTURE

EMC has said it is betting hosting software and services will be a key to growth over the coming years. In November, Chief Executive Joseph Tucci said the company had developed hardware known as "Hulk" and software dubbed "Maui" for running these types of data centres.

This month he announced the formation of a new division to sell services and software over the Internet.

It is a new area for EMC with plenty of competition from some of the biggest names in technology.

IBM, Hewlett-Packard, Symantec and Microsoft are also exploring the area to diversify their sales. They are competing with younger, Internet-focused companies Google, Amazon.com and Salesforce.com.

Analysts say prospects for the sector are better than in the late 1990s when key players, including Exodus Communications, were among the Internet boom's highest-flying stocks.

At that time, most major hardware and software companies did not go into the Web hosting business. Instead, they sold their equipment to companies such as Exodus and telephone carriers that built data centres. Exodus went broke in 2001 after the dot.com bubble burst.