EMC Gets Back to Basics with Acquisition of Avamar

EMC Corp. today said it agreed to pay $165 million in cash to acquire Avamar Technologies Inc.

As InfoWorld reports:

Avamar, of Irvine, California, makes data-storage software that allows companies to ensure they back up each data segment only once, a process known as de-duplication. Avoiding redundant backups can save network bandwidth, backup time and money.

Avamar will be the 12th company EMC has acquired this year, representing a $2.8 billion total investment over that period.

Unlike EMC’s acquisition of RSA earlier this year, this one is right in EMC’s wheelhouse, makes good sense, and represents excellent value. In fact, I concur with the view of IDC analyst and vice president John McArthur:

EMC’s acquisition of Avamar brings innovative data-protection technology and another creative team into the EMC portfolio, while Avamar gains a powerful channel for the company’s solutions.

Avamar already uses EMC’s Clariion servers as a target for disk-based backup and EMC’s Centera servers for long-term archiving, so the integration of the company into EMC’s Storage Product Operations group is expected to go smoothly.

Debate over Alleged Conflict of Interest at TechCrunch

TechCrunch’s Michael Arrington believes he and his publication are getting a raw deal from the mainstream business and news media. He says, among other things, that the mainstream news media don’t understand the nature of TechCrunch, which he describes as follows:

TechCrunch is different. TechCrunch is all about insider information and conflicts of interest. The only way I get access to the information I do is because these entrepreneurs and venture capitalists are my friends. I genuinely like these people and want them to succeed, and they know it and therefore trust me more than they trust traditional press.

I have read TechCrunch, off and on, for more than a year. I appreciate the coverage it provides, but I feel sometimes that Arrington and his crew become shills for companies in which they have a financial interest. What makes TechCrunch different also makes it open to question and reproach.

It doesn’t strive for objectivity, which Matthew Ingram rightly notes is unattainable, but I have found that it also struggles for balance and perspective, which are critical ingredients of good critical commentary. TechCrunch is pumping up what passes for a Web 2.0 bubble, and it does so with neither apology nor restraint.

Mark Evans writes: "If you don’t like what TechCrunch or Arrington are doing, don’t read it."

That’s fair comment, but I think we also have the right to hold Arrington to account and to question whether he is continuing to provide quality and value to readers.

A thin line separates what Arrington does from the paid news-flavored advertising supplements that are distributed inside or alongside daily newspapers. Those neither have nor warrant credibility as news sources, and Arrington will have to take care to ensure that his online publication doesn’t cross over into that territory.

IronPort Acquires PostX in Move to Boost Margins, Improve IPO Prospects

In a stock-for-stock transaction between two private companies, email-security vendor IronPort Systems has announced the acquisition of email-encryption vendor PostX.

The acquisition will enhance IronPort’s regulatory-compliance offerings by allowing it to integrate PostX’s native email encryption into its email-security appliances. According to a news item at Computer Business Review, IronPort also intends to bundle the PostX technology into hosted email security services, which would take it into competition with some of PostX’s OEM partners, among others.

When the deal has been completed, in about five or six weeks, PostX shareholders will own about seven percent of the merged company, according to an IronPort spokesman. PostX’s 60 employees are expected to be relocated to IronPort’s San Bruno, Calif., headquarters, and no layoffs are expected as a result of the acquisition.

This is a logical move for IronPort, which gives it a fuller email-security solution with the addition of encryption and lexicons for extensive regulatory-compliance coverage. The acquisition should help IronPort defend and improve its profit margins. Where it partnered previously for encryption, it now will be able to own and offer an integrated solution to customers.

Competitively, the move helps IronPort compete against some of the many smaller players in the email-security space, but it does not offer sustainable advantage against the likes of Symantec or Microsoft, which both intend to take larger shares of the messaging-security space for large enterprises and SMEs.

If IronPort moves into hosted services, as seems inevitable, it will compete against formidable rivals, including Microsoft and MessageLabs, though there is room for another compelling offering.

Will the acquisition better position IronPort for an IPO? It probably will make an IPO more likely by next spring, presuming that the post-merger integration of PostX goes well, which it should.

IronPort has been looking to own and offer more of its own in-house products and technologies rather than to rely on partners for certain aspects of email security.

The company had a reseller relationship with Symantec for the latter’s Brightmail anti-spam technology, but it recently decided to end that partnership and to offer its own anti-spam technology exclusively to its customers. Again, the objective was to reduce external dependencies and to boost profit margins in a market that has been commoditizing and consolidating.

Nonetheless, IronPort is continuing to partner in some areas. It announced yesterday a partnership with data-loss prevention vendor Vontu that will see an integration of the two companies’ technologies for joint customers. The partnership includes combined marketing and sales efforts. Vontu has been rumored to be in acquisition talks with Symantec.