EMC Picks a Fight For Consumer Storage

EMC is used to having the enterprise storage space by the throat, but knows it has a lot of work to do before becoming a household name among consumers, to whom it would like to begin selling a range of storage devices and services. That may explain why it seems to be trying to intimidate the competition by boasting about its storage-software expertise and dangling news of a significant alliance with a major U.S. retailer.

The consumer market is attractive to enterprise storage device vendors like EMC, Dell, HP, Western Digital and others thanks to the explosive growth of consumer-generated digital data like video, photos and music. It is also being driven by a couple of other trends.

Joel Schwartz, EMC’s storage platform chief — in New York to promote the company’s consumer push –- noted that there are more than 130 million households with multiple networked computers in the U.S. and Europe and another 65 million in the Asia-Pacific region. EMC hopes to persuade consumers that they need to link those multiple computers to a single storage device.

Another factor is the soaring popularity of low-cost, lightweight, and memory-starved netbooks, which is acting as “an unplanned market accelerator,” Schwartz told me over lunch. But Schwartz knows that EMC won’t have the field to itself. “As it becomes a big category, the big guys are going to play,” he told me.

Of course, the big guys are already playing. HP, Cisco and Western Digital all made announcements last week enhancing their consumer offerings.

Schwartz said EMC will differentiate itself from the others by making its software easy to use; he noted that EMC storage software includes dual-authentication security features that other entrants to the market will be hard-pressed to duplicate (or for which they’ll pay EMC royalties, which would be okay with Schwartz too).

EMC also plans to offer customers the ability to store their data indifferently on networking appliances in their homes and on remote servers via the Internet. In a way, EMC’s strategy could be a case study in the integration of technology from acquired companies. It inherits security software from RSA and its online offering from Mozy.

Its competitors? To hear Schwartz, their prospects are dim because their expertise doesn’t extend to storage software. HP is a PC-maker that depends on Microsoft software that doesn’t accommodate other formats (i.e., Bluetooth, Macintosh, video); Western Digital and NetGear lack talented software engineers; and LinkSys, owned by Cisco, knows routers, not storage software.

Get the idea? As Schwartz put it, “where you stand is a function of where you sit.” That said, EMC still has to overcome the fact that it has no name recognition in the consumer space.

Schwartz has an answer for that too: He told me EMC will soon announce a partnership with a major U.S. retailer that will feature EMC network storage devices prominently. Schwartz said EMC will also make a name for itself thanks to “4-click installation.”

Ultimately, though, Schwartz said EMC will make its stand with software. “We can all do good hardware,” he said. “This is about the software.”