Exclusives Featured

EMC Takes On NetApp For Data Domain’s Affections

EMC (NYSE:EMC) started a gunfight in the storage world today by offering an astonishing $1.8 billion for data deduplication sweetheart, Data Domain (NASDAQ:DDUP). This $30 per share offer one-ups rival NetApp (NASDAQ:NTAP) by $5 per share, which looked to have sealed the deal with a solid $1.5 billion offer on May 20. EMC’s offer is all-cash, while NetApp had mixed cash and stock.

Why all the interest? Data Domain has emerged as the leader in data deduplication, a key technology for controlling the rapid growth of duplicate data in enterprise IT. Although both EMC and NetApp offer deduplication products, Data Domain’s products were widely lauded and adopted by end users, especially in smaller organizations.

Although many questions were raised about the fit for Data Domain within NetApp’s product lineup, the fit in EMC makes more sense. Their Quantum-based VTLs are expensive and enterprise-focused, while a new Data Domain-powered line might have broader appeal. Although EMC appears to have cemented their Quantum relationship with a $100 million investment to keep the backup products vendor afloat, the fact that they did not buy the company outright might indicate that they had second thoughts. EMC’s Chuck Hollis claims that Data Domain makes sense at many levels throughout EMC’s product portfolio.

Others have suggested that the offer was purely defensive, designed to keep Data Domain out of NetApp’s hands or to drive up the eventual price the West coast team would eventually have to pay. This would be a very expensive gamble, however, since NetApp already has homegrown deduplication technology and could walk away entirely.

About the author

Stephen Foskett

Stephen Foskett is an active participant in the world of enterprise information technology, currently focusing on enterprise storage, server virtualization, networking, and cloud computing. He organizes the popular Tech Field Day event series for Gestalt IT and runs Foskett Services. A long-time voice in the storage industry, Stephen has authored numerous articles for industry publications, and is a popular presenter at industry events. He can be found online at TechFieldDay.com, blog.FoskettS.net, and on Twitter at @SFoskett.

3 Comments

  • I don't think the EMC fit makes more sense, unless there is reason to believe that Data Domain's products are cleaning up in EMC accounts. Netapp needs this more than EMC because it needs an off-platform product to sell to non-Netapp customers. Data Domain gives Netapp an entre to the broad market again – and especially into EMC accounts that it can't get with any other of it's existing products.

    EMC is defending itself against a Netapp Trojan horse.

  • Data Domain was offered 1.8 million dollars at a certain point and they refused. Then came the big 2.1 million offer. I lost interest then and now I have no idea what happened.
    __________
    Frank C. Tannehill
    domain name

  • Data Domain was offered 1.8 million dollars at a certain point and they refused. Then came the big 2.1 million offer. I lost interest then and now I have no idea what happened.
    __________
    Frank C. Tannehill
    domain name

Leave a Comment