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EMC regroups with new software emphasis

The struggling storage maker promotes a handful of executives to lead three major business units. Analysts say now's the time to deliver if EMC wants to keep competitors at bay.

Struggling storage maker EMC has regrouped into three major business units as part of its new focus on software, the company said Thursday.

Erez Ofer, 39, was promoted to executive vice president of the new Open Software Operation. The group will lead the company's "Auto Information Storage" (AutoIS) initiative to increase the automation of storage-management software. The initiative also will let EMC's software control operations such as copying or backing up data on rivals' storage hardware.

Ofer most recently was senior vice president and chief software architect. He holds 20 storage patents and is a nine-year EMC employee.

Dave Donatelli, 36, was promoted to executive vice president in charge of the storage hardware group, which works on EMC's flagship Symmetrix and midrange Clariion systems, the company said. Donatelli, a 14-year EMC veteran, most recently was senior vice president of corporate marketing and also led eight acquisitions.

Frank Hauck, 42, will continue to lead EMC's customer interactions under a new group called Customer Operations. Hauck, an 11-year EMC employee, was promoted to executive vice president.

EMC has been struggling with falling profits and layoffs spurred by the technology spending slowdown. It also has seen increased competition from rivals such as IBM, Compaq Computer, Hitachi Data Systems, Hewlett-Packard and Sun Microsystems.

The company has suffered enough that some have suggested it could be a takeover target.

Though EMC largely has sold hardware used to store corporate data, a key part of its future lies in software.

"If EMC delivers half of what it promised (in the AutoIS initiative), then the company could begin to re-exert hegemony in the enterprise storage market," Merrill Lynch analyst Thomas Kraemer said in a research note Thursday.

In addition, "EMC has a significant storage software and networking lead at a time when the market has begun to shift in this direction," he said.

In other changes, Moshe Yanai, who helped design the Symmetrix system at the heart of EMC's transformation into a storage company, has been named a fellow and will advise Chief Executive Joe Tucci on technology. Chief Financial Officer Bill Teuber has been promoted, acquiring the additional title of executive vice president.