Data deduplication vendor's shares begin selling at $15, then zoom up 56 percent in first hours of trading.
Storage system and data deduplication provider Data Domain ended all the industry whisperings June 27 by announcing that its initial public offering of 7,390,000 shares of common stock has been activated on the Nasdaq Global Market with the shares priced at $15 apiece.
Shares of Data Domains common stock began trading today under the symbol DDUP. With 90 minutes of trading time left, share prices had climbed to $23.46 up an eye-popping 56 percent. The stock ended the day at $24 per share, up 60 percent from the opening.
"This is, of course, a big day in the life of our company," Data Domain Marketing Vice President Beth White told eWEEK. "Everybody here is really excited, morale is good and well all have a toast tomorrow when the family gets together."
Data Domain itself is offering 7 million of the shares, with the remaining 390,000 being offered by a selling stockholder. Net proceeds to the company are expected to be approximately $94.2 million, the company said in a statement.
Data Domain will not receive any of the proceeds from the sale of the shares being sold by the selling stockholder, the company statement said.
Click here to read more about Data Domains performance claims for its DD580 storage controller.
The company has granted to the underwriters a 30-day option to purchase up to an additional 1,108,500 shares from Data Domain at the initial public offering price less the underwriting discount.
Goldman, Sachs & Co. and Morgan Stanley acted as joint book running managers and Thomas Weisel Partners LLC and Pacific Crest Securities acted as co-managers for the offering.
The Santa Clara, Calif.-based companys most valuable intellectual property is the way it handles deduplication of data. Deduping, as it is commonly known, is a method by which redundant files and even blocks of data within files are eliminated to improve data accessibility, which can drive down operational and power/cooling costs in the data center.
This process can happen at several points in the information-gathering process: as data enters the system, at the server level or at the storage level.
Data Domain last fall introduced
what it claimed to be the industrys first data center-scale deduplicating protection storage array, the DDX.
Simon Robinson, storage research director of The 451 Group in San Francisco, told eWEEK he believes that Data Domains IPO is significant in a number of ways.
"First, it indicates that disk-based data protection utilizing deduplication capabilities is increasingly becoming a must have feature for small to mid-sized organizations," Robinson said. "As well as providing speedy online local recovery, platforms such as Data Domains are also helping these organizations implement cost-effective disaster recovery operations, sometimes for the first time.
"Secondly, the IPO establishes Data Domain as the early front-runner in this emerging market, which should provide a wake-up call to other data protection vendors that deduplication is a real technology that users are keen to implement right now," Robinson said.
The deduplication market has grown from nothing three years ago to be worth an estimated $260 million in 2007, IDC reported. "At this growth rate this could easily become a $1 billion market by 2009," Robinson said.
"As major vendors such as EMC, Symantec, Network Appliance and Quantum Corp. come to market, we believe that the race is on."
To read a review of Data Domains gateway with virtual tape library features, click here.
Gartner Group storage analyst Dave Russell told eWEEK that "DD has been on the watch list of those storage companies poised for rapid growth."
Russell agrees that Data Domain is a company in a good position.
"Theyve been hot...in overall interest. Our call volume on the deduplication methodology has gone through the roof," Russell told eWEEK. "The demand for this technology transcends geography and verticals."
It makes sense to businesses of all sizes to store and transmit less data and do it at less cost, Russell said.
Data Domain has "pre-existing technology that is really like DDX on steroids. Weve done the metrics on throughput, and these arrays do everything the company says they do," he said.
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