Can a small storage firm catering to individuals and small businesses find happiness with a FORTUNE 500 giant looking to reach the very same buyers?

Call them the "synergies that bind." EMC's union with Iomega Corporation featured compatibility in abundance from the start.

Without question, EMC and Iomega complement each other's market strengths. Jon Huberman, former Iomega CEO and now president of the EMC Consumer and Small Business Products Division, says he recognized early that the companies shared "a culture of hustling for success and a real appreciation for the burgeoning consumer and small-business market."

As EMC's acquisition of Iomega became official in June 2008, Iomega's people began sharing EMC's resources, experience, and market clout to get an edge. A lot is at stake. Consumers with their ever-growing digital footprints constitute the world's fastest-growing market for data storage.

So far, it's been a good blend. Iomega is enjoying cost benefits and tremendous access to technology. Meanwhile, says Huberman, "EMC is gaining a fuller understanding of consumer and small-business markets and learning how to leverage its technology to address their needs."

Joel Schwartz, senior vice president and general manager of EMC's Common Storage Platform Operations, sums up the arrangement by saying: "For the first time, EMC's enterprise CIO customers will be EMC's (Iomega's) consumer customers. Great leverage!"

Compatibility

The melding of the companies' market goals and technologies is the most compelling aspect of the match.

Steadily, for years now, EMC has extended down-market toward midsize businesses. It started focusing even lower in 2007, after an EMC-sponsored IDC study predicted that 70 percent of the world's digital information will be created by individuals, not corporations, by 2010.

In January 2008, EMC introduced EMC LifeLine OEM Software for consumers and small office/home office users. Sold via hardware partners, LifeLine was EMC's first home-grown consumer product.

Acquiring Iomega propelled the consumer expansion dramatically. Jay Krone, EMC's Storage Platforms Marketing senior director, says, "With LifeLine, we dipped a toe in the water. With Iomega, we jumped into the deep end."

EMC had previously accumulated a nice collection of products for consumers and small businessesincluding Mozy online backup and Avamar de-duplication software. But consumer-realm experience and selling channels remained lacking.

Iomega provides desktop and portable hard drives and network storage solutions for consumers and small businesses with up to 100 users. It has the "consumer DNA" EMC needs. It also has a familiar brand name and excellent distribution channels.

Additionally, San Diego-based Iomega wanted to rise above the commoditizing hard drive marketplace. An acquisition would let Iomega delve into what Huberman describes as a "treasure trove" of EMC technology to fold into products. Iomega would tap into EMC's reputation for storing, protecting, and managing data, as well as leverage EMC's engineering and purchasing muscle.

"EMC is the leading storage company in the world," says Mike Nikzad, Iomega vice president of operations. "Iomega is a major force in consumer storage, and we're going after the market together."

That market boasts impressive numbers: 71.5 million businesses worldwide have 100 employees or fewer, according to IDC. And EMC hasn't reached them before now.

Another plus: The EMC connection means Iomega can sell its small-business products to distributed enterprises-large companies such as insurance firms that operate small branches. Their needs match Iomega's NAS product capabilities perfectly.

Growing on consumer roots

Although Iomega is bundling EMC technologies with its products to enhance them, Iomega retains its name and operating model under EMC. Iomega established a solid brand over its 28-year history. Its employees, along with members of the EMC Retrospect and LifeLine teams, form the core of EMC's consumer-focused division. They work closely with EMC Mozy teams who support consumers.

"We're not abandoning Iomega's roots," says Schwartz, who oversees the Consumer and Small Business Products division. "We're adding functionality to the products to make them the compelling choice in those spaces."

The Iomega StorCenter ix2, a two-drive, 1TB network storage system with LifeLine software and a price starting at $299.99, launched on October 15, 2008. Supporting up to 20 users, it is geared toward the prosumer, consumer, and small business. It follows Iomega's launch in July of external hard drives with a free downloadable software bundle that includes EMC's Retrospect Express backup and recovery software and Mozy online backup service.

Iomega's Marc Tanguay, group product manager for network storage, says the bundling of LifeLine and other EMC technology will let Iomega move ahead of competitors in the consumer/small business NAS market. The ix2 and other products to follow offer easy-to-install software that gives smaller users data management capabilities such as automatic data backup, multimedia central storage, and unique features such as compatibility with security cameras and Bluetooth devices.

Stocking EMC

It would have seemed unfathomable a few years ago, but the EMC logo will be prominently visible on retail store shelves.

Iomega had been selling EMC Retrospect with its external drives since 2004, with EMC mentioned on the bottom of the box. Krone notes: "We're moving from the bottom to the front."

Iomega's experience in promoting consumer products is key. After all, back-to-school sales and promotions featuring family photos are foreign territory to EMC. Iomega is also adept at designing products that appeal to consumers visually and ergonomically.

A lot of competition exists in the consumer market, Krone says, because there are relatively few barriers to entry. He believes EMC's biggest challenge will be staying focused, prioritizing product pushes, and making the most of Iomega's retail track record.

EMC will use its array of technologies to add enough functionality to the consumer products to "significantly increase the barriers to entry" for competitors, Schwartz confirms.

Global opportunities

Iomega has a strong retail presence in Europe. Huberman expects the acquisition by EMC to help Iomega grow its U.S. market share, and he sees Asia, Eastern Europe, and Latin America as growth markets.

Iomega's consumer know-how should help EMC drive forward a pilot consumer effort for LifeLine launched in 2008 in China. Since its debut, LifeLine has been largely marketed through OEMs such as Intel. China was the only market where EMC offered a branded prosumer product called the EMC Storage Credenza, sold via distributors. That launch was a success, Krone says, helping EMC learn about doing business in the low end of the Chinese market.

That effort will go to the next level when the StorCenter ix2 debuts in China later this year.

In fact, Schwartz regards EMC's pursuit of the consumer segment as a promising strategy for future growth in emerging markets. He says, "This represents, over time, EMC's greatest opportunity to penetrate those markets worldwide. In the next five years, the consumer and small business space in emerging markets will become as big as or bigger than the mid- or high-end markets."