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EMC Out & About Again
Storage giant EMC makes M&A news again with its purchase of "virtual computing" shop VMware for about $625 million. The deal marks the third big EMC buy since last July as the company migrates from hardware storage to the management of data shuttled around on the net.
The prior two deals, Documentum for $1.7 billion and Legato for $1.3 billlion, gave EMC document management and backup software expertise, respectively.
VMware deveops software that allows users to "see resources as if they were dedicated to them. The administrator manages and optimizes resources globally across the enterprise."
EMC's former core business was the sale of (RAID redundant array of independent disks) storage systems. As commodization of that sector has proceeded, the company has moved rapidly toward value-add opportunities related to the manipulation of large-scale data, particularly through networks. These actions have apparently met with market approval: EMC's stock price has moved from $11 to $14 in the last six months,
The company's rapid-fire acquisition spree may now slow, however: with $2.6 billion in cash prior to the VMware deal, further big-time excursions are increasinlgy constrained.
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