Tom Petrocelli's take on technology. Tom is the author of the book "Data Protection and Information Lifecycle Management" and a natural technology curmudgeon. This blog represents only my own views and not those of my employer, Enterprise Strategy Group. Frankly, mine are more amusing.

Thursday, March 27, 2008

What am I missing?

Maybe I'm not as smart as the rocket scientists at EMC. On the other hand, maybe they are just pursuing a bad strategy. My own ego requires I think the latter is the case so...

What I don't get is EMC's pursuit of Iomega. If this is a downmarket move ala Cisco and Linksys, then it's a not a good one. Iomega was once a great brand and technology leader. They invented the ZIP and Jazz drives and pioneered portable hard drives. They were to the 90's what SanDisk, Fabrik, and Maxtor are today - a premium purveyor of personal mobile storage.

Sadly, Iomega has fallen on hard times. First cheap CD-ROMs and later flash memory eroded the need for their supercharged floppy disk products. In comparison to these alternatives, the products that Iomega was selling became expensive, bulky, and low capacity. Lately, they have tried to produce personal storage devices such as CD and DVD writers as well as small, USB portable hard drives and tape cartridge devices. In other words, the commodity stuff that lots of companies are making.

Recently they were planning to sell out to a Chinese outfit called Excelstor. It was presented to the public that Iomega was buying Excelstor but it's really the other way around. This makes EMC's move even more mystifying. They are making an unwanted, unsolicited bid for a ho-hum consumer storage products company whose brand no longer has any cachet or even geek appeal. Ask your average teenager who Iomega is and they look at you like you're talking about Calvin Coolidge.

If EMC wanted to expand into consumer markets they could have purchased a startup on the upswing like Simpletech instead of letting Fabrik grab them. Heck, they could have gone for LaCie or even Maxtor if they wanted to attack the consumer market. Perhaps it would have cost more (though Fabrik only paid $43M for Simpletech) but you get what you pay for. Iomega is last century enough to be almost steampunk. On top of that all, EMC is getting a bunch of products, like the tape cartridge products, that they can't possibly think have any legs in the market.

So, I don't get it. I usually find EMC's moves wise. RSA gave them a strong security portfolio and no one can argue with the VMWare move. The market has proven that one. But Iomega? I think the rocket scientists might have midfired this time.

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