EMC to Sell Dropbox Rival Syncplicity

By Don Clark 

EMC Corp. is ending a three-year foray into the kinds of data-storage services offered by Dropbox Inc. and Box Inc., agreeing to sell control of its Syncplicity business to investment firm Skyview Capital LLC.

Financial terms of the transaction wasn't disclosed. Under the agreement, EMC would retain an unspecified ownership stake in Syncplicity, which helps companies sync and share data files both on-premises and in remote facilities, and would continue to help sell its offerings.

EMC, best known for selling hardware for storing corporate data, bought Syncplicity in 2012 for terms that weren't disclosed. The startup was founded in 2008.

Skyvew Capital, Los Angeles, specializes in helping convert units of companies into separate businesses. One of the firm's executives, Jonathan Huberman, will become chief executive of Syncplicity.

EMC, of Hopkinton, Mass., has been struggling with weak demand for some of its older storage hardware. Activist shareholder Elliott Management Corp. last year took a large stake in the company and began pushing for changes such as spinning off EMC's majority stake in software maker VMware Inc. No actions are expected until at least September under a standstill agreement the parties announced in January.

An EMC spokesman said Syncplicity had achieved momentum but required investments in new features to keep up with the trend toward employees who work with mobile devices. "This is a step away from EMC's core infrastructure strength," he said.

Terri McClure, a senior analyst with consulting and research firm Enterprise Strategy Associates, said EMC's sales team specializes in targeting hardware buyers at companies--not people inside corporate departments who tend to purchase file-sharing services. As an independent company, Syncplicity would have more freedom to partner with companies that could be of more help in selling its services, she said.

"I think there is a good opportunity," Ms. McClure said. "But it's going to be tough to take on the brand cachet of Box and Dropbox."

Mr. Huberman, who led data storage company Iomega Corp. before selling it to EMC in 2008, stressed that Synplicity differed from Box and Dropbox in allowing customers to store sensitive files on their own premises as well as in cloud-style data centers Synplicity operates. Citrix Systems Inc. is the main competition for such "hybrid" services, he said.

Syncplicity would operate from Santa Clara, Calif., Mr. Huberman said. The company hasn't disclosed its revenue or headcount, but he said most existing employees would be offered jobs after the separation.

Write to Don Clark at [e-mail]

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