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    Home IT Management
    • IT Management
    • Storage

    Data Domain Files IPO, Cuts Deal with Quantum

    By
    Chris Preimesberger
    -
    March 30, 2007
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      Data Domain, which makes storage appliances for disk-based backup and network-based disaster recovery, filed a Form S-1 registration statement late on March 30 for an initial public offering of as much as $100 million in common stock.

      Goldman Sachs, Morgan Stanley, Thomas Weisel Partners LLC Pacific Crest Securities will underwrite the IPO, according to a preliminary offering document filed with the Securities and Exchange Commission, Reuters reported.

      Data Domain said it would have no comment on the filing until April 2, a company spokesperson told eWEEK.

      Data Domain, based in Santa Clara, Calif., is seeking a Nasdaq listing under the symbol “DDUP,” an abbreviation for “deduplication”—which is one of Data Domains chief stocks in trade.

      Data deduplication is a process which eliminates redundant data throughout the storage network, allowing for better system performance and efficiency. It is one of the hottest technologies in the storage market at this time.

      There are several approaches to this process; Data Domain and others utilize one called “variable length deduplication,” which was patented by Quantum.

      Quantum, based in San Jose, Calif., stands to profit handsomely when Data Domain begins selling its public stock. Data Domain and Quantum have a pre-ordained cross-licensing deal going into the IPO, according to the S-1 filing.

      Quantum, which makes both digital tape and spinning disk storage products, already has received a total of 390,000 shares of Data Domain stock—pre-sale value, approximately $3.3 million—and can sell it when it goes public. In return, Data Domain will continue to use Quantums veriable length de-duplication process in its product line, with no legal strings attached.

      “In the fourth quarter of 2006, we received an inquiry from Quantum Corporation regarding our interest in licensing certain patents that Quantum believed we may have previously incorporated into our products or may incorporate in the future,” Data Domain states in the S-1 filing.

      /zimages/1/28571.gifClick here to read about how deduplication is the leading trend in storage.

      “As a result of our discussions with Quantum, which commenced in 2006, we entered into a patent cross-license agreement in March 2007, with an effective date of January 1, 2007.

      “Under the terms of the cross-license, we issued Quantum 390,000 shares of our common stock in March 2007. We engaged an independent third-party valuation firm to assist us in valuing the shares of our common stock as of the date of issuance. Based on this valuation, the value of the common stock issued under the agreement was approximately $3.3 million,” Data Domain stated.

      “The balance of the settlement amount represents payment to Quantum for a release of all claims for any past acts or conduct, and we have recorded the amount as settlement expense in our consolidated statements of operations for the year ended December 31, 2006,” Data Domain said.

      The Data Domain board of directors approved the IPO filing on March 26.

      /zimages/1/28571.gifCheck out eWEEK.coms for the latest news, reviews and analysis on enterprise and small business storage hardware and software.

      Avatar
      Chris Preimesberger
      https://www.eweek.com/author/cpreimesberger/
      Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 16 years and more than 5,000 articles at eWEEK, he has distinguished himself in reporting and analysis of the business use of new-gen IT in a variety of sectors, including cloud computing, data center systems, storage, edge systems, security and others. In February 2017 and September 2018, Chris was named among the 250 most influential business journalists in the world (https://richtopia.com/inspirational-people/top-250-business-journalists/) by Richtopia, a UK research firm that used analytics to compile the ranking. He has won several national and regional awards for his work, including a 2011 Folio Award for a profile (https://www.eweek.com/cloud/marc-benioff-trend-seer-and-business-socialist/) of Salesforce founder/CEO Marc Benioff--the only time he has entered the competition. Previously, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. He has been a stringer for the Associated Press since 1983 and resides in Silicon Valley.

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