Feeds

Dedupe this: NetApp buying Data Domain

Surprise deal obscures good results

Choosing a cloud hosting partner with confidence

Comment Announcing its intent to be king of the dedupe hill, NetApp is buying Data Domain for $1.5bn. The announcement overshadowed NetApp's fiscal 2009 earnings which beat Wall Street estimates.

The IT world has been agog with rumours of a big takeover, Cisco and EMC being often mentioned, but Data Domain and NetApp was an unexpected pairing. Neither company is weak or in trouble and neither is known to be boldly acquisitive. Yet NetApp has struck a strong and decisive deal with Data Domain: a somewhat out-of-character deal given its track record of buying technology to be integrated into its existing offerings, with the exception of Decru.

The most recent Data Domain earnings showed revenues up 50 per cent year-on-year and 7 percent sequentially. It made a profit too, showing it was capable of growth in the midst of the recession. It is certainly no financial basket case.

Data Domain is the energetic leader of the deduplication market, powering its inline deduping technology with Intel processors and intent on becoming a storage platform company in its own right, or so we thought. It has a strong line of products which it has sold vigorously, but with two perceived weaknesses. So far it has no answer to Ocarina's content-aware compression, the ability to dedupe graphic images and videos such as JPEG and MPEG files that traditional dedupe can't touch. Secondly Data Domain has yet to cluster its boxes together and so scale out.

Competitors such as Sepaton and Exagrid can cluster their deduping boxes and so offer greater scale than Data Domain. This is a capability that many expected Data Domain to deliver, after it has introduced Nehalem-based controllers.

NetApp is paying about $25/share, a 40 percent premium when the deal was announced yesterday. There is an $11.45 cash plus 0.75 NetApp shares for each Data Domain share. The deal is expected to close in 60 - 120 days, with NetApp gaining increased earnings in its fiscal 2010.

NetApp motivations

NetApp says it is buying because the two businesses are complementary, Data Domain's boxes being used to deduplicate files backed up to disk, and not competing with NetApp's FAS lines of online file and block storage. Data Domain will be able to grow its international sales faster by going through NetApp's European and Asia/Pacific distributors and resellers than by growing its own international channels.

There is overlap with NetApp's existing VTL (Virtual Tape Library) line but that will be sorted out. NetApp isn't saying anything specific about this or Data Domain's roadmap or staffing, other than to affirm broad commitment to the roadmap and to the principle of keeping Data Domain as a growing and profitable business run as a relatively independent operation. We might imagine that NetApp's own VTL product line developments are now on hold and that the line is facing practical end of life, with due arrangements for replacement products, support and other considerations yet to be made.

NetApp must have decided that it is cheaper to buy its way to dedupe product success than to continue to develop its own deduping VTL product line.

Alacritus was bought by NetApp in April, 2005, for its virtual tape library technology, and resulted in the separate VTL product line, it not being integrated into ONTAP. We might take the view that NetApp is effectively replacing that technology four years later with Data Domain's.

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
'Kim Kardashian snaps naked selfies with a BLACKBERRY'. *Twitterati gasps*
More alleged private, nude celeb pics appear online
Wanna keep your data for 1,000 YEARS? No? Hard luck, HDS wants you to anyway
Combine Blu-ray and M-DISC and you get this monster
US boffins demo 'twisted radio' mux
OAM takes wireless signals to 32 Gbps
Google+ GOING, GOING ... ? Newbie Gmailers no longer forced into mandatory ID slurp
Mountain View distances itself from lame 'network thingy'
EMC, HP blockbuster 'merger' shocker comes a cropper
Stand down, FTC... you can put your feet up for a bit
Apple flops out 2FA for iCloud in bid to stop future nude selfie leaks
Millions of 4chan users howl with laughter as Cupertino slams stable door
Students playing with impressive racks? Yes, it's cluster comp time
The most comprehensive coverage the world has ever seen. Ever
Run little spreadsheet, run! IBM's Watson is coming to gobble you up
Big Blue's big super's big appetite for big data in big clouds for big analytics
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.