EMC Wins Bidding War For Data Domain

EMC has won control of Data Domain over rival suitor NetApp.

NetApp said yesterday that it couldn’t out bid EMC’s latest all-cash offer of $2.1 billion for Data Domain, thus the deal is done.

In a statement, NetApp CEO Dan Warmenhoven said:

NetApp applies a disciplined approach to acquisitions, one focused intently on creating long-term value for our stockholders. We therefore cannot justify engaging in an increasingly expensive and dilutive bidding war that would diminish the deal’s strategic and financial benefits.

Data Domain said in a statement:

Data Domain’s board of directors has unanimously determined that the definitive merger agreement with EMC and the terms of the EMC tender offer are advisable, fair to and in the best interests of Data Domain and its stockholders.

So what now?

Well, NetApp will get dinged for a $57 million break-up fee from Data Domain, while EMC takes the reins at deduplication technology company and hopes for the best in controlling a narrow segment of the storage market.

In the meantime, for those who were keeping tabs on the inadvertent power players in the Data Domain battle, Storage Monkeys has put together a list of winners and losers. While I don’t so much care for the labels “winners” and “losers”, I do like getting a glimpse at where these players stand with regard to future acquisitions.

Perhaps you will too.

• NetApp - WINNER - $2.1 billion was too much for NetApp but there is value in NetApp acquiring another dedupe vendor. W. Curtis Preston suggested Exagrid and Sepaton could be had for a fraction of Data Domain.
• Cisco - LOSER - Now that EMC is a bit bloated with their new prize, EMC got a whole lot more expensive to buy if they were on Cisco’s radar.
• IBM - WINNER - The possibility of IBM acquiring NetApp is suddenly more appealing… and they don’t need a dedupe product.
• Quantum - LOSER - No matter what EMC says, there is no way they are going to be able to sell two different target dedupe products. Always a possibility for NetApp to acquire since they share some of the IP Data Domain uses… but who wants to buy a tape company these days?
• FalconStor - TBD - Will EMC continue to use FalconStor’s VTL? They don’t have to, but it’s much more elegant for the enterprise customer than Data Domain alone.
• HDS - LOSER - First they lost their partnership with Diligent when they were bought by IBM, now they will probably lose Data Domain. Of the big vendors, HDS has been the worst at articulating a consistent dedupe strategy so they will continue to play musical chairs - and customers will end up buying some other product.
• HP - TBD - HP needs to commit to a dedupe solution by buying Sepaton (which is their ‘go to’ solution right now) or move on to something else.
• Sepaton - WINNER - They are now the hot dedupe product if there’s a buyer
• Exagrid - WINNER - If SMB dedupe is interesting, then they are it. Otherwise, they will continue to be a sleeper and possibly losing deals to backup software vendors that already do dedupe (like CommVault and CA)
• CommVault- TBD - They have been over-hyping their dedupe capabilities by likening themselves to Data Domain. Dell and NetApp might be intrigued, but they could do better by shopping elsewhere. Does anybody really want to buy a backup software company these days? Is the market for backup software really growing enough to make a difference?

Get Caught Up:

EMC raises its acquisition offer for Data Domain

EMC’s battle for Data Domain - Will history repeat itself?

EMC rejected. Data Domain recommends buyout from NetApp

EMC’s bid for Data Domain could top $2.1 billion

EMC reaches out to Data Domainers in an open letter

EMC eyes Data Domain for acquisition

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