'A lot at stake' in VMware's Mozy take-over, analysts warn

EMC's big Mozy spin-off has risks as well as synergies but analysts agree it's all about cloud consolidation.

Figures moving cloud blocks

ANALYSIS EMC's big announcement yesterday that it was shuffling back-up and recovery service Mozy into VMware is designed to take advantage of the "synergies" between the two stable mates.

However, leading analysts have warned there is a great deal at stake, too. Especially for Mozy.

If EMC plans to leverage Mozy into additional cloud services the repercussions of yesterday's sale could go either way, according to Rachel Dines, infrastructure and operations analyst at Forrester Research, who added that there were "no clear winners or losers" from the proposed deal.

"Mozy could turn out to be extremely successful and move beyond just back-up and recovery and into new spaces, or else the entire project could fail, taking Mozy down with it," she told IT PRO's sister site Cloud Pro.

"I believe that EMC has made this move to align VMware with their most successful cloud offering in order to potentially use it as a jumping-off point for more cloud services. From a back-up perspective though, I don't see this as a smart move on EMC's part."

Dines added: "Mozy is one of the most successful cloud backup solutions thus far, and a portion of that success can be attributed to the storage brand name EMC that stands behind the product. That is not to say that VMware isn't a strong brand name, but in the storage and backup world, it doesn't have the clout that EMC does."

The way in which Mozy has "bounced around" between parent companies since it was acquired by EMC in 2007 "confuses and erodes the brand," according to Dines.

VMware has traditionally focused on larger customers while Mozy has targeted small-to-medium-sized businesses (SMBs) but Dines said there wasn't necessarily a disparity in what the two companies were trying to achieve.

"Mozy's sweet spot is currently in the SMB, but it is starting to move up into the enterprise as well," she said. "VMware's enterprise focus could potentially help penetrate these new markets."

"Conversely, VMware will gain an additional route into SMBs, potentially gaining market share in that sector," she added. "This is probably one of the additional reasons EMC made this move."

UK-based storage research analyst with IDC, Daniel Bizo, said he believed the transfer of Mozy's operations reflected EMC's publicly stated strategic commitment not to offer cloud services to the end user, whether they be enterprise or home-users.

"By distancing EMC from Mozy they back-off from having any conflicts of interest with service providers while making their messaging bolder," he said.

Bizo said EMC's message to providers was essentially "we will help you build the clouds, and won`t compete with you".

"VMware's strategy is quite different in that they run their own cloud operations to complement private cloud build outs, offering the opportunity for enterprises to load balance or quickly roll-out disaster recovery solutions, for example," he said.

"With this, handing over Mozy to VMware is not just strategically sound to the companies involved, but there may be some operational expenditure efficiencies and marketing synergy as well. At EMC, Mozy only served as a test vehicle providing insights to EMC how a cost efficient storage-as-a-service operation works."

At the simplest level, EMC's decision amounted to a consolidation of its cloud-focused solutions into one group VMware, according to Dines.

"Long term, I suspect that VMware wants to move into more cloud services like Mozy which could include any number of applications (or even compute) delivered via the public cloud, although they deny today that this is their intention."

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