The IT giant's latest acquisition target fills a major hole in its product line.ORLANDO, Fla.EMC, the world market leader in several information management and storage sectors, on Nov. 1 announced a signed agreement to acquire privately held Avamar Technologies, a provider of enterprise-class data protection software that features data deduplication technology.
EMC made the announcement at Storage Networking World here.
Data deduplication, which eliminates redundant data throughout the storage network, was a major hole in the Hopkinton, Mass.-based company's product line. Avamar, founded by young Harvard graduate Jedidiah Yueh seven years ago, is far and away the market leader in the space, with 15 of the Fortune 50 companies and 400 customers overall.
EMC will acquire the Irvine, Calif.-based company in a cash transaction valued at about $165 million. The acquisition is expected to be completed within 30 days and is not expected to have a material impact on EMC's revenue or EPS for 2006, EMC executive vice president and chief development officer Mark Lewis said.
Despite criticism from some of its investors and from industry analysts, EMC is continuing to keep the acquisitions coming. The Hopkinton, Mass., data storage and IT infrastructure giant has swallowed so many companies over the past five years (Avamar is No. 31) that it has its own mergers and acquisitions news Web page.
"This is my favorite acquisition for October," said a jovial Lewis at a press event Oct. 31.
EMC has had to tighten its belt as a result of its buying spree. Click here to read more.
Avamar provides a major source of IT intellectual property that can be used throughout EMC's product line, Yueh told eWEEK.
"As time goes on, our technology will affect basically everything the company does, in all sectors," Yueh said. "The elimination of redundant data makes anyone's IT system more efficient and cost-effective."
Avamar's software will augment EMC's core products in information protection and recovery management, improving the way customers protect their data and accelerating the widespread move from tape to disk-based recovery solutions, Lewis said.
"Companies are making significant investments today to improve their methods for data protection and data recovery," said John McArthur, an analyst at IDC, in Framingham, Mass.
"EMC's acquisition of Avamar brings innovative data protection technology and another creative team into the EMC portfolio, while Avamar gains a powerful channel for the company's solutions."
The overwhelming value proposition of backup-to-disk is getting stronger by the day, said Mark Sorenson, senior vice president of information management software at EMC.
"Most recently, the limitations of tape-based backup have inspired the creation of new technology such as data deduplication to significantly alter the cost and efficiency equation for disk-based backup. Avamar is acknowledged as the industry's best at helping customers transcend the shortcomings of traditional tape-based methods, thereby accelerating the ongoing shift to disk as the de facto backup and recovery medium," Sorenson said.
Avamar's software utilizes patented data deduplication technology to backup data onceand only onceon a global basis. Avamar identifies redundant data segments at the source, thereby reducing the amount of network bandwidth used and data stored.
Using this and other patented Avamar technology, customers can achieve an industry-leading 300:1 daily data reduction in real-world applications, Lewis said.
"Far too much of what is saved is simply a copy, and you don't need all those copies," Lewis said.
Avamar already leverages EMC's portfolio, including Clariion servers as a target for disk-based backup and Centera for long-term archiving. For customers that require both disk- and tape-based data protection, Avamar has been designed to work in a complementary fashion with existing products like EMC NetWorker, Lewis said.
Upon completion of the acquisition, Avamar will be integrated into EMC's Storage Product Operations, or SPO, group. Avamar CEO Ed Walsh will report directly to Sorenson.
The transaction marked the second major deduplication-related deal this year. In March, ADIC acquired Australia-based Rocksoft for $63 million cash. Rocksoft owned patented data deduplication software.
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