Shares of storage giant EMC ( EMC) were getting a solid bump Monday on the strength of an upgrade by UBS.

Analyst Benjamin Reitzes promoted EMC from neutral to buy-1, writing in a Monday note that, "It is poised to benefit from solid storage demand as well as an ongoing mix shift to higher-margin software. With software increasing as a percentage of total sales, and benefits from restructuring, EMC is well positioned for margin expansion and mid-teens organic growth."

In recent trading, shares of EMC had gained 54 cents, or nearly 4%, to $14.15 on strong volume.

EMC has moved aggressively into storage-related software, largely through acquisitions. Software now accounts for about one-third of the company's total revenue and an even higher percent of its profit.

Reitzes noted that the explosion in digital content is fueling the need for storage, as well as for the software need to manage the stored information.

"Going forward, we believe these software acquisitions will help support top-line growth, margin expansion and free cash flow, unlocking hidden shareholder value, as valuations move more toward a software multiple and away from traditional hardware," he wrote.

Reitzes also upgraded another storage company -- Network Appliance ( NTAP) -- to buy-1 from neutral, saying "the company can continue with product cycles as well as benefits from a strong software portfolio. We also believe that the IBM ( IBM) OEM deal will continue to pay dividends. With momentum in software, we believe NTAP's gross margins can remain above 60% with revenue growth in the 30% range."

IBM has been buying storage products from NetApp and reselling them under Big Blue's own brand.

Shares of NetApp were up $1.22, or 3%, to $40.29.

UBS has investment banking-related business with both companies.