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(photo credit: Courtesy)
In the wake of three local purchases this year, information management company EMC Corp. has embarked on a strategy to make Israel an integral part of its acquisition activities and further invest in its operations here.
"We did not have a strategy to buy in Israel but were looking at areas where we needed technologies and they happened to be here," Tom Heiser, EMC's senior vice president corporate development and new ventures told the press at the EMC annual technology event in Tel Aviv on Tuesday. "We woke up when we made the acquisitions because we realized these are the best companies in each of their fields. Now, we want to be more proactive in Israel."
Massachusetts-based EMC spent over $300 million in Israel-related deals this year, acquiring Ramat Gan-based Kashya for $153m. in May and following that up with the purchase of process management provider ProActivity and application discovery company nLayers for undisclosed amounts a month later. Its $2.1 billion acquisition of information security provider RSA in September included RSA's Herzliya-based subsidiary Cayota, bringing EMC's total Israel work force to 350 employees.
In total, EMC spent $7b. to acquire 11 companies in 2006 in an effort to grow its software and services businesses and fill missing areas in its technology portfolio.
It is looking to strengthen its position in all areas including the storage, virtualization, content management, security and resource management market segments. According to the company, these areas have a combined revenue opportunity of $60b. and will be the focus of its acquisition and research and development activities.
In addition to looking for further acquisitions, Heiser said EMC this week committed to work closely with the Israeli venture capital industry as part of its investment strategy. In the past, EMC has had a similar strategy with the VC community in the San Francisco and Boston areas to make investments in start-up companies with the VC industry leading the funding. Adding Israel to the list covers the three regions "with the most mature VC markets we've seen for our industry," Heiser said.
Meanwhile, the company invested $1.2b. in R&D this year and $3b. over the last three years and Heiser stressed the investment would continue unaffected by the company's restructuring. EMC said in October it would cut 1,250 jobs after reporting lower-than-expected third quarter profits due to expenses incurred by its stock buybacks through the year.
The restructuring was not expected to affect EMC's R&D or Israel activities.
"As long as Israel continues to generate investment and innovation that is relevant to EMC we are going to continue to grow," Heiser said. "We will grow [in Israel] by expanding our four businesses here through investing and hiring people in those units and through the potential to acquire new companies assuming they are relevant to our strategy."
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