Netapp couldn't beat Data Domain, so it eats them instead

The storage industry screws just keep turning.  A few minutes ago I heard that Netapp was acquiring Data Domain.  Congratulations to the stockholders of Data Domain, but I hate to see another growing, independent storage company get swallowed.  Once Data Domain joins Netapp, 3PAR and Compellent are going to be the only publicly traded  array vendors with consistent sales growth over the last couple years. 

This deal surprises me because Netapp's VTL products compete with Data Domain's products. Last October Chris Mellor from The Register wrote on how Netapp finally had an answer to Data Domain, Quantum and EMC.  Apparently that answer needed to be amended six months later with cash and stock worth $1.5B. Netapp will have to spin this carefully to their shareholders and VTL customers. It certainly is possible to have overlapping products in the product line, but I'm not sure how well that will work for the de-dupe market. 

One part of the story could be a SAN-only storage array from Data Domain - meaning it wouldn't come with a NAS head. This would give Netapp access to the SAN market in a way they have never been able to do with their Filer products. 

I can't help but wonder if part of this deal is about generating interest in Netapp.  Lately EMC, 3PAR, Compellent and Sun have been generating most of the attention in the storage industry and Netapp has been pretty quiet.  That will change for a few months now (or at least until the next big acquisition occurs).

Otherwise, Data Domain lacks a corporate rapper, but if you ask me, they never had that far to go to catch up with Netapp. Still 3PAR's 3P might have to step it up a notch now that the Double Team can tag team with the Netapp rap crue.

Comments

[Salil]

shouldn't
This would give Netapp access to the NAS market in a way they have never been able to do with their Filer products.

be
This would give Netapp access to the SAN market in a way they have never been able to do with their Filer products.

[marc farley]

Yes, Thanks Salil! (change made)

[Chris Fricke]

The bigger question is where is the 3Par deduplication strategy?

[nate]

Just a week ago..

http://www.netapp.com/us/company/news/news-rel-20090513.html

“With budgets constricted across IT organizations, NetApp continues to offer the most compelling deduplication solutions to help our customers increase storage efficiency and save time and money,” said Patrick Rogers, vice president of Solutions Marketing, NetApp. “Our customers have responded with rapid adoption that has topped even our own expectations. Now, with this evaluation from Cohasset, customers have even more reasons to implement deduplication today and reduce their storage footprint.”

Kinda funny.

[marc farley]

Chris,

3PAR has taken a partnering approach to de-dupe and we have been working with Data Domain. I imagine this could all change, but we'll see because Data Domain has partnership relationships with other major array vendors too that Netapp might want to maintain - such as HDS.

Nate - That is kinda funny, and I think it shows you how difficult it is to get everybody on the same page. In this case, I'm sure there were many Netapp employees that had no need to know about it until it was publicly announced today.

[nate]

NetApp also has the V-Series which I think is certified with 3PAR(among many others), which shows they are smart enough to know that not everyone wants NetApp disks.

I seem to recall being told by a NetApp engineer that the V-Series was one of their most popular products.

[marc farley]

IMHO Netapp would benefit from more partnerships and expanding their industry ecosystem beyond the v Series. Partnership leverage is usually a very good thing.

[Pete Steege]

I guess Netapps answer to Data Domain turned out to be Data Domain.

[Steve]

Mark, you say "3PAR and Compellent are going to be the only publicly traded array vendors with consistent sales growth over the last couple years." but you left out Isilon - are they not growing?

[marc farley]

Their sales fell from $31.8M in 4Q 2008 to %26.9M in Q1 of 2009. So no - they haven't shown the same consistent growth.