EMC to Buy Data General

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EMC to Buy Data General
WALTHAM, Mass., August 9th, 1999 (Reuters)

High-end data storage leader EMC Corp. (NYSE:EMC) on Monday moved to grab a chunk of the mid-range storage business with a deal to buy Data General Corp. (NYSE:DGN) for $1.1 billion in stock, the companies said. EMC, which holds a 35 percent share of the $12 billion high-end storage market, said it will lend its considerable distribution and support muscle to leverage Data General's CLARiiON line of mid-range storage systems.

What this means:

  1. EMC strengthens its hold on the disk subsystem market in general

  2. EMC gains presence in the mid-range disk subsystem market (its present focus is the high end)

  3. EMC gains an entre into Dell's volumes (DG/Clariion presently is Dell's primary disk subsystem supplier)

  4. EMC opens the possibility of marketing its own database clusters, by combining DG's Aviion servers with its own arrays. (EMC has reportedly told Aviion that the group will be kept on for at least two years. It is unclear whether this means "as is", or in "maintenance mode", i.e. layoffs, and selling only existing product, no new development)

  5. Data General, although ending as a distinct corporate entity, will gain some stability - although layoffs often follow buyouts like this.

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