EMC Buys Mozy

September 24th, 2007 at 12:00 am


EMC Corporation is a 20+ year old public storage company with a $40 billion market cap which was among the most hard-hit in the dotcom boom and bust.

They bought Utah-based startup backup service Mozy this weekend for $76Million.  "The rationale behind EMC buying Mozy is still unclear, however. But one suspects that it would be a key component to them going after small- and medium-sized businesses, much as SoonR is doing by shifting its focus to backup-and-restore features. And although the $76 million sticker price does seem rich, EMC can afford to be lavish: it’s sitting on a windfall generated by the VMWare (VMW) IPO."(Om Malik, GigaOM)

The price tag for which Mozy was acquired is actually generous for the startup after geting $1.9Million funding last 2005, the $76Million is a 40X kickback for the investors of Mozy.

However there is a trend going on with many niche services suddenly being acquired for big bucks by big companies. Their comptetions valuatiopns suddenly go down.  I mean, did you see another video-sharing site get bought for as much Google paid for YouTube?  My point exactly.

Which means, now is the great time for other online storage startup like Mozy to take offers while they still can.

All in all, this is another surprise in the highly volatile workld of Web2.0 startups as well as another inspiration for other startups to keep their fingers crossed for that big buyout.