EMC buys a 3d firm with labs in Israel

For the third time in several weeks, the Hopkinton data-storage firm EMC Corp. is buying a small technology company with branches in Israel.

EMC will pay an undisclosed amount for ProActivity Software Solutions Inc. of Newton. The privately held company, which creates software that manages information collected by business process management systems, maintains its research-and-development operations in Netanya , Israel.

The acquisition is the latest in a spate of deals that feature significant investments by EMC in the robust Israeli software market. Last week EMC spent an undisclosed amount to buy nLayers Inc., a San Jose, Calif., storage software company with an Israeli laboratory. In May, EMC spent $153 million to buy data backup firm Kashya Inc., also located in San Jose, with a development lab in Israel.

The Israeli connection with each of the three companies was ``coincidental," according to EMC spokesman David Farmer . ``What EMC is looking to do is purchase technology that fits a specific purpose in any given area of the business," he said.

Each of the companies makes a product that fills a hole in EMC's product line. The ProActivity software suite will let EMC add new functionality to its Documentum software, used by companies to store and archive ``unstructured" data like e-mail messages, letters, and memos. EMC regards this kind of data storage as a huge growth opportunity, especially with recent federal regulations like the Sarbanes-Oxley Act , which require businesses to archive and index this type of data. Kashya makes data-replication software that permits rapid data recovery in case of hardware failures or virus attacks, while nLayers makes programs that help track server computer activity on large, complex data networks. Both are capabilities that fit nicely into EMC's plan to become the leading vendor of software to help companies manage stored data.

Israel invests vast amounts in scientific research relative to its size. According to the Progressive Policy Institute, an economic think tank, Israel spent more than 5 percent of its gross domestic product on scientific research in 2003, double the amount spent by the United States.

Steve Duplessie, senior analyst at Enterprise Strategy Group in Milford, said Israel's tradition of strength in computer software makes it an ideal research-and-development center for US companies. Many giant US firms run Israeli laboratories. Much of the basic research for newer versions of Microsoft Corp.'s Windows operating system is done in the company's Israeli labs. And the most recent Core processors from giant chipmaker Intel Corp. are largely based on research from Intel's Israeli scientists.

It was an Israeli-trained scientist, Moshe Yannai, who designed the architecture of EMC's most important product, the Symmetrix series of high-end data-storage systems. ``They're very computer software and communications-savvy," in Israel, said Duplessie.

Hiawatha Bray can be reached at bray@globe.com.