BOSTON 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
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
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.
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
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
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.
"The big companies are investing in this seriously now. The
technology is much different. This isn't about dot.com
companies looking for a place to get rich quick," said Doug
Chandler, an analyst who follows the industry for market
The business did not live up to expectations at the time,
partly because it was still early in the rise of the Internet
as a business tool and companies were reluctant to trust the
Web for accessing valuable software and data, Chandler said.
That is still the case with many large companies, but it's
changing among smaller businesses that do not have the
expertise to run and secure their own data centres, he added,
noting that outsourcing such operations can cut costs.
So far EMC has only announced one key services product, an
upgraded version of an automated backup service known as Mozy
that it purchased last year.
EMC said earlier this month it plans to sell Mozy's
services to large corporations. Mozy backs up computers over
the Web, encrypting the data to keep it secure and storing
identical copies at mirrored data centres. EMC provides those
services via a recently upgraded infrastructure that it calls
(Editing by Andre Grenon)