EMC Wastes No Time Taking Over Data Domain

 
 
By Chris Preimesberger  |  Posted 2009-07-20
 
 
 

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.

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