Analysis: EMC or NetApp Will Pay Way Too Much for Data Domain - Page 2

Rob Stevenson of InfoPro has been talking to customers about this deal.
"For customers, the preferences are clear," Stevenson told eWEEK. "When we asked NetApp shops what acquisitions/partnerships would help them-over 300 large firms interviewed-they said NetApp and Data Domain are synergistic, and a combination of their products would simplify their operations.
"When EMC shops are asked the same question, end users mention NetApp and Compellent as top acquired preferences; Data Domain is not cited," Stevenson said.
Joe Martins, storage analyst at Data Mobility Group, told eWEEK it is a no-brainer as to which offer Data Domain shareholders will accept.
"From a purely financial perspective, DD stakeholders would be fools not accept EMC's ridiculously high counter-offer," Martins said. "Without a doubt in my mind, NetApp's original offer was already based on an inflated, distorted view of Data Domain's contribution to the big picture.
"My advice to shareholders: Accept EMC's offer and laugh all the way to the bank. As for NetApp, it should walk away and be grateful EMC saved it from paying too much for too little."
Martins said that his message to NetApp is straightforward.
"Licensing dedupe is the way to go. It's important in the same way that good fuel management enables a more fuel-efficient engine, but it's just one small piece of a much larger infrastructure engine," Martins said. "Remain focused and continue to dominate in your current markets-there's plenty of growth to be found there. I suspect you may find yourself the target of an acquisition in the next two to five years."
Arguably, for the first time in its history, Data Domain will have the mandate to integrate its IP into a broad spectrum of storage products, Martins said.
"At EMC, Data Domain will have to prove its value in a hostile environment. Throw the dedupe IP into EMC's gladiator pit, and let the customers decide who survives. That's a good thing for all of us," Martins said.
Brian Babineau of Enterprise Strategy Group said he thought the "interesting dynamic is EMC's interest in Data Domain during the transaction. It appears they have gotten more serious about the deal as time progresses, whereas in the beginning it looked like they were simply going to make it more expensive for NetApp.
"We shall see if NetApp counters one more time."

Editor's note: This story has been updated to clarify EMC's relationship with FalconStor for its VTL.

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 15 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...