Will EMC pay too much for DDUP? That's the question everybody is going to be asking for years. It's an awful lot of money, but de duplication of backup and archive data is probably going to be a very big deal for years to come.
I like Steve Duplessie's take on it: he said Netapp should feel relieved because they would have been under immense pressure. EMC, on the other hand, has a larger business and more ways to leverage their DDUP investment - such as their channel relationship with Dell. Of course, that would mean that Dell would have to agree to be even more dependent on EMC for their storage business.
Netapp gets a consolation prize - the $57 Million break up fee which will be paid by Data Domain. It's not a lot but I'm sure they can put it to good use. The larger problem for Netapp is how they are going to replace DDUP in their plans. Obviously there were things they wanted to do with DDUP that they aren't going to be able to do now. It will be interesting to see what their next move will be. There are other de duplication companies available if they want to grow their business that way.
With all due respect to Jay Kidd, I do not buy his assertion that NetApp viewed DataDomain as just a "want" (see Chris P's 7/8/09 eWeek article). How many companies of NetApp's size and bankroll are prepared to plunk down $1.6b and raise the stakes to $1.9b for something they do not feel that they need? Clearly, NetApp felt it had to have DataDomain.
But why? Why bother going down that road in the first place? Frankly, NetApp need only OEM dedupe technology to get what it needs. Was the alleged incremental value of DataDomain really worth nearly $2b to NetApp? I seriously doubt it.
On the other hand, that little maneuver sucked EMC into the vortex.
Yes, I still believe EMC overpaid for what is essentially a single cog in a vast IT machine - a $2.1b bid for DD is YouTube hilarious. Laughing aside, I believe that DD is an interesting addition to EMC's stable with a value not yet fully understood. Hypothetically speaking, DD could be leveraged in several areas, but it should compete with EMC's existing de-dupe lineup for the privilege. A little healthy de-dupe competition within EMC ought to keep the innovations flowing and the customers happy.
Posted by: joseph martins | July 08, 2009 at 07:20 PM
Will NetApp pursue Quantum now for it's DD technology?
Posted by: Kurt Klein | July 09, 2009 at 09:51 AM
Kurt, I don't think Netapp will make a bid for Quantum. To me the issue for Netapp is going to be finding another growth vehicle that they can leverage and I don't think Quantum gives them that opportunity.
Posted by: marc farley | July 09, 2009 at 10:50 AM
Netapp just earned some sweet rejection cash. If only dating worked that way. Who cares about them? I'm more worried about Data Domain customers... like me.
Posted by: Chris Fricke | July 09, 2009 at 11:49 AM
great idea for a blog post! coming soon to a storagerap near you!
Posted by: marc farley | July 09, 2009 at 11:52 AM
I think NTAP will end up getting acquired at this point. IBM, Dell or HP would make the most sense. Their market cap is only $5B, so it wouldn't take much for some of the big guys with deep pockets and a bunch of cash on hand to do the deal.
Posted by: "The Captain" | July 15, 2009 at 07:02 PM