NEW YORK -- EMC, which picked up storage resource management specialist nLayers for an undisclosed fee today, looks set to continue on its M&A tear over the coming months. CEO Joe Tucci identified security and virtualization as potential target areas during a speech to open the firm's analyst day. (See EMC Acquires nLayers and EMC Outlines Strategy.)

Having spent $4.5 billion on a slew of acquisitions in just over two and a half years, EMC added the San Jose, Calif.-based startup to its storage resource management portfolio today. (See EMC Captures Captiva, EMC Acquires Acartus , and EMC Cops Documentum.) nLayers' flagship product is its InSight appliance that monitors data center applications and devices, enabling users to check service levels and usage patterns.

The firms have a history. EMC already OEMs nLayer's technology, which forms the foundation of one of EMC's Smarts products -- the Smarts Application Discovery Manager software. EMC execs told Byte and Switch that nLayers' workforce of around 30 employees will join the storage vendor, although they will remain at their existing site.

Smarts, acquired by EMC in late 2004, built its reputation by identifying root causes of performance degradation or failure in IP networks. EMC rolled out Smarts IP Availability Manager for NAS earlier this year. (See EMC Stays Smart, EMC Gets Smarts, and EMC Smartens Its NAS.)

Tucci hinted at future acquisitions in other key areas during his keynote today. "More missing pieces than anyplace else are in the security area," he said, in response to a question from an analyst. He added that he is also looking to tuck "several more things" into EMC's VMWare technology. (See VMware Eyes Enterprise, Microsoft, VMware Unveils New Suite, and VMware Intros Alliance .)

Tucci did not reveal more details on the firm's acquisition strategy, but one analyst attending the event, who asked not to be named, said users are now calling on the vendor to bolster its security story. "They have a lot of demand from their enterprise customers to marry data and security," he told Byte and Switch, adding that, in particular, the firm needs to boost its encryption and digital rights management portfolio.

EMC already plays in both of these spaces. The supplier acquired digital rights management specialist Authentica earlier this year and has forged encryption OEM deals with Decru and Neoscale. (See EMC Acquires Authentica.) But the analyst said that no single vendor, including the likes of Symantec and Network Appliance, currently has a "silver bullet" that effectively covers both storage and security.

Tucci fleshed out EMC's future product roadmap today, explaining that the vendor will be adding new low-end versions of its Symmetrix hardware, which currently scales from 96 to 2,400 drives. "In the future, you can look to us to take what we have now and drive it down further."

The vendor will adopt a similar strategy with its midrange Clariion AX family. According to the exec, "You will see smaller members of this family, as well as larger members of this family." EMC plans to launch the new Symmetrix and Clariion boxes sometime this year. EMC execs would not provide a specific launch date for the new hardware.

Similarly, Tucci promised new versions of its Celerra systems to follow hot on the heels of the vendor's new low-end Celerra NS350. "There's lower-end products coming."

EMC is not the only vendor focusing on smaller businesses. A number of firms offer cut-price, scaled-down storage for SMBs (small to medium-sized businesses). Many SMBs' data loads are growing to enterprise levels, and there is a feeling that this is a relatively untapped corner of the storage market. (See Vendors Set Sights on SMB Windfall, Storage Dives Down, SNW: Small, SAS-sy & Safe, and NEC Launches SMB Arrays.)

Tucci pointed to future software enhancements today: The vendor plans to replace its RecoverPoint CDP product with technology acquired through the recent acquisition of Kashya. (See EMC Coughs Up for Kashya and EMC Pays $153M for Kashya.) "We think that Kashya is superior," he said.

In trading today, EMC shares fell 35 cents to $12 dollars (2.83 percent).

— James Rogers, Senior Editor, Byte and Switch. Special to Dark Reading.

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