EMC gets cozy with Mozy, but will consumers bite?
The problem with selling your wares to Fortune 500 companies? There are only 500 of them. And the high-priced, hard-charging sales force required to woo them is prone to scandal, as a recent sex-bias lawsuit against EMC alleges. That, I believes, explains why the storage-hardware maker is getting into the consumer business with its $76 million purchase of Mozy, an online data-backup service. With only 180,000 customers, the purchase price seems high, as GigaOm and others have noted. But small businesses are often better courted with consumer-friendly offerings than with hard-sell pitchmen.
Mozy, with online-backup plans starting at $4.95 a month, opens up EMC to businesses that would never bother to buy their own servers. And Mozy itself, as it adds hardware to cope with growing demand, makes a fine in-house buyer of EMC hardware. That's the business logic, anyway. In practice, there's a flood of online-storage startups on the market, and EMC may find the consumer business tough sledding. That makes me think of a less rational, but emotionally satisfying, explanation for EMC's Mozy buy: Boring enterprise businesses like EMC have a bad case of Google envy, and want to tap the consumer market to salve executives' ego and perhaps boost their market cap.