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EMC offers firms online backup

01:00 AM EST on Wednesday, January 23, 2008

By Melita Marie Garza

Bloomberg News

Hopkinton, Mass.-based EMC Corp., the world’s biggest maker of storage computers, will introduce a service that lets companies back up information on their personal computers over the Internet.

The MozyEnterprise service was to be available in North America yesterday, EMC vice president Tom Heiser said in an interview. It will be offered internationally later in the year.

To spur growth, EMC is pushing into software and services and away from reliance on less-profitable storage computers. Chief executive officer Joseph Tucci has spent $8 billion buying software companies in the past four years. The service announced yesterday uses software from Berkeley Data Systems, which EMC bought in October.

“It’s going to help EMC move from storing bits in hardware to information management,” said Roger Kay, an analyst with Endpoint Technologies Associates Inc. in Wayland, Mass. “It’s still in the early stages of development as a business.”

MozyEnterprise uses a model known as software-as-a-service, pioneered by companies such as Salesforce.com Inc. and NetSuite Inc., which offer their programs through a Web browser. EMC will compete with Iron Mountain Inc. and Seagate Technology’s EVault.

Companies using EMC’s service can cut their storage costs by as much as 30 percent because they don’t have to buy and maintain their own backup computers, said Roy Sanford, vice president of marketing for the new services.

Monthly subscriptions start at $5.25 per computer, plus 70 cents per gigabyte of information backed up, EMC said.

The company already has about 500,000 customers for a version of the service for consumers and small businesses. Larger companies such as General Electric Co. also use the service.

EMC’s move into software-as-a-service is consistent with its strategy to attract clients and drive higher gross margins by adding software to its traditional hardware business, said Kimberly Caughey, an analyst at Fort Pitt Capital Group in Pittsburgh, which manages $1.2 billion.

“Increasingly, customers want one throat to choke, so companies that can supply more items get higher on the short list for purchasing,” Caughey said.

EMC fell 68 cents, or 4 percent, to $16.30 in New York Stock Exchange composite trading, amid a global selloff in equities. The shares rose 40 percent last year.

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