EMC Wastes No Time Taking Over Data Domain

By Chris Preimesberger  |  Posted 2009-07-20 Print this article Print

It's nice to have a lot of cash in the bank. EMC said July 20 that it has already acquired about 82 percent of Data Domain's common stock at $33.50 per share since July 8, when competitor NetApp decided to drop out of the bidding for the deduplication storage maker.

EMC hasn't wasted any time in taking control of its latest acquisition, storage deduplication provider Data Domain.

The world's largest provider of storage-related software and hardware said July 20 that it already has acquired about 82 percent of the company's common stock at $33.50 per share in cash since July 8, when competitor NetApp decided to drop out of the bidding for the Santa Clara, Calif.-based storage appliance company.

Before the deal, EMC owned about 4 percent of Data Domain. It has been EMC's practice to buy small stakes in companies and hold them for a period of time before acquiring them.

EMC, which has acquired about 60 companies in the last six years and has more than $6 billion in cash on hand, said it expects to finish the acquisition by July 31.

EMC said that it will use Data Domain as the basis for a new division focused on the development of next-generation disk-based backup, recovery and archive software and hardware. The Hopkinton, Mass.-based company also said that former Data Domain CEO Frank Slootman will run the new division, which EMC believes will create about $1 billion in revenue during the next year.

With the addition of Data Domain, EMC now has another form of deduplication at its fingertips as well as control of the sales channel ecosystem of a key established provider of data deduplication software. EMC bought deduplication specialist Avamar Technologies in 2006 and has a licensing agreement for that same kind of software with Quantum.

Analysts and industry insiders have asserted that a key motivation for EMC to acquire Data Domain was to keep the company from being acquired by competitor NetApp, which had first announced it intended to buy Data Domain on May 20.

Data deduplication eliminates redundant data from a disk storage device in order to lower storage space requirements, which in turn lowers data center power and cooling costs and lessens the amount of carbon dioxide produced to generate power to run the hardware.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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