EMC acquires more companies but wants more respect

In the last three years, EMC has acquired 27 company, spending about $4.7 billion. Earlier this week the company added its 28th acquisition, ProActivity, content management analysis software that will fit in with Documentum, which EMC acquired for $1.7 billion three years ago. Terms of the acquisition were not disclosed. Today, the 29th notch was added as EMC acquired Akimbi Systems, which developed "virtual lab" software that tests how applications should be configured before deployment. Akimbi will be integrated with EMC's VMware division.

Earlier this week I met Mark Lewis,  EMC's chief development officer, at a dinner with fellow journalists. Lewis' main job is integrating all the acquired companies and products into EMC's growing product porfolio. He told me that security is the next major thrust of the company's partnering and acquisition strategy. "Most security today focuses from the outside in--we are going to focus from the inside out," Lewis said. "You don't get rid of perimeter protection, but you've got to build vaults to protect the data." With more open data standards like XML, information can be more easily secured, he added.

During the dinner, Lewis ticked off the strengths of EMC's product portfolio--more than 200 products and projected revenue above $11 billion for this year. But, he expressed frustrated that EMC doesn't get the respect he thinks it deserves. According to Lewis, EMC is the 9th largest product technology company and the 6th largest software company. "I believe we can beat HP and IBM in everything we do," he boasted.

Over the last three years, the stock has been relatively flat, despite strong growth in its different businesses. Shares hit a 14-month low on June 7. "When people say EMC, they think the storage company," Lewis said. "The problem is the brand hasn't moved as fast as the products--we aren't just a storage play." Like all companies, EMC wants Google-like multiples, or at least to have some of the love that is HP is getting lately. In the last year, HP's stock has appreciated about 30 percent, which has the effect of garnering more respect among competitors, customers and Wall Street. And, as with many frustrated tech companies, lots of employee option holders are yearning for a big payday.

It looks as though part of EMC's strategy, like Oracle's, is to just keep buying software and services companies, in hopes that gaining more share of wallet among customers will justify a higher market cap. Lewis identified five infrastructure areas--VMware, content management, resource management, storage virtualization and security--as $1 billion businesses in the making via organic growth and acquisitions.  He didn't rule out a big bang acquisition, but said that the smaller, string of pearls approach to acquisitions is the preferred path to helping gain the respect he thinks the company deserves.