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NetApp buys Data Domain for $1.5bn

Will it dedupe the deduping?

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NetApp announced late Wednesday it will acquire dedupe specialist Data Domain for $1.5 billion in cash and stock. The purchase will effectively spring NetApp to the forefront of vendors selling redundant-data-busting technology when the deal closes in an expected two to four months.

NetApp said the company intends to run Data Domain as a separate product line within its operations. In a conference call describing the deal, NetApp chief marketing officer Jay Kidd labeled the purchase as mainly an opportunity for market presence rather than blending Data Domain technology with its own.

The firm's rationale is that Data Domain adds multi-vendor disk space for backup, while NetApp provides a larger reach of customers, particularly in the EMEA and APAC regions and certain big enterprise accounts.

"Our objective will be to amplify Data Domain's success, grow Data Domain's revenues as quickly as today's economy will allow, and create systems and incentives within NetApp to nurture Data Domain to its fullest potential," Warmenhoven said in a statement.

NetApp said that because its dedupe technology mostly deals with primary storage while Data Domain works minimizing tape for data archiving, there's going to be minimal overlap between the two storage companies.

But NetApp does sell NearStore VTLs with separate dedupe licenses - and that certainly compete with Data Domain. Kidd admits there's some issues in the blending, but claims the benefits of acquiring Data Domain will exceed product overlap woes. He added that the companies are not publicly talking about product integration plans at this point and will continue to operate as two entities until the deal closes.

Santa Clara, California-based Data Domain has 825 employees and reported about $274m in sales last year. Kidd didn't say how many of the Data Domain workers will be brought aboard in the purchase, but assured the value of the companies team is "very well understood" by NetApp. ®

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