EMC, a large storage products company with about $12B per year in sales has agreed to acquire Mozy, an online backup service for about $76m. At first this seems like a natural fit, EMC makes storage products and Mozy provides backup data storage to customers. But in another way this is a strange marriage. EMC is known for it's high-end storage systems. Mozy is a no-frills online backup service. EMC has traditionally been one of the higher-priced storage providers. Mozy provides cheap and free backup services. EMC has traditionally targeted the corporate and enterprise markets. Mozy is popular among consumers, home users, and people who are willing to have a few ads shoved in their faces in exchange for free or cheap services. I can't see EMC's existing corporate customers using an ad supported service.
This acquisition may be EMC's first move into the home and small business market. Some things will certainly change for Mozy. As a startup with VC backing, their motives were to gain as many customers as possible and find a buyer, nevermind making money. EMC will certainly be more interested in the bottom line. It is interesting to note that the $76m is pocket change for EMC; this story broke 3 days ago and it has not even made the news on EMC's own website.
This acquisiton along with Seagate's $185m purchase of EVault and Microsoft's Window Live SkyDrive Beta, and Googles Gdrive (rumor or not), further validates the rapidly expanding market for online backup and storage. Backing up data to tapes, DVD's, and other portable media is becoming obsolete fast. Online backup is more reliable, more secure, and less expensive for consumers and small businesses. I think we can expect to see more consolidation in the online storage market in the next few months.
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