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A lot of people in the data storage world are watching the skirmish between EMC and NetApp as they contest who is going to acquire deduplication specialist Data Domain.
The prevailing wisdom is that EMC and NetApp both want to acquire Data Domain for its highly regarded, midrange-market storage deduplication appliances, which are fast, cost-effective and easy to use.
But at least one key figure, Quantum CEO Rick Belluzzo, thinks there may be more to it than that.
A little background: Data Domain’s board of directors accepted a revised offer of $1.9 billion in cash and stock from NetApp on June 3 and intends to stick with it. EMC, swimming in cash, has offered a cool, unsolicited $1.8 billion in straight dollars to complete the transaction.
It’s also no secret that EMC would like to extend its reach into the midrange and SMB storage markets during the next few years, and Data Domain would be one way to improve that standing immediately.
But there is a difference of opinion about what exactly EMC’s motives are.
All these merger and acquisition shenanigans don’t play all that well with Quantum, a longtime EMC partner that supplies both deduplication software and virtually all the tape storage that EMC sells.
Even though Data Domain has accepted the NetApp offer, there are many people in the business who will not yet write off EMC. EMC is an acquisition-oriented company accustomed to getting what it wants. The Hopkinton, Mass.-based company has taken over about 50 storage- and security-related firms in the last six years.
If EMC were to acquire Data Domain and its prized deduplication wares, that would give EMC no fewer than three different deduplication products. EMC started by buying Avamar Technologies in 2006 for $165 million, then signed a partnership with Quantum and now is trying to add Data Domain.
How many dedupe choices does one company need?
Belluzzo is quite aware of all this and is convinced that EMC’s dance with Data Domain is more about keeping Data Domain out of NetApp’s grasp than it is about acquiring any additional technology-no matter how good it may be.
“EMC already has a great relationship with us for enterprise dedupe, and it is working well for both companies,” Belluzzo told eWEEK. “I can’t see that adding Data Domain’s products really will add that much value in the broader scope of their product line.
“I do think that NetApp, which is a growing company, would benefit greatly by adding Data Domain because it has products that NetApp really needs. I believe that EMC just doesn’t want to see that deal happen.”
Belluzzo pointed out that Quantum’s deduplication software is much better suited for the high-end enterprise market because it scales further than Data Domain’s.
“Our DXi [storage system line] can start at less than 1TB and go all the way up to 220TB of usable capacity with a single software architecture. Data Domain tops out at 32TB,” Belluzzo said.
“Quantum also provides tight integration with tape machines, and features policy-based deduplication and replication capacities for both VTLs [virtual tape libraries] and NAS [network-attached disk storage], and it’s all centrally managed.”
Last week, Quantum introduced its DXi2500-D, a high-performance, deduplication appliance for remote and branch offices optimized for replication back to a central data center.
“This has about four to five times the capacity of Data Domain’s appliance at about the same price,” Belluzzo said.
EMC CEO, President and Chairman Joe Tucci has said publicly that he admires Data Domain for its accomplishments and that the smaller company often reminds him of EMC itself.
Tucci also has said that if EMC does acquire Data Domain, EMC will expand development of one of its flagship products that uses Quantum’s software.
Another interesting bond between Quantum and EMC, Belluzzo said, is the fact that EMC recently loaned $75 million to Quantum to improve Quantum’s capital structure.
If EMC can persuade Data Domain’s board and stockholders to reject the NetApp deal, it will gain a stronger presence in the midrange storage market and gain a lot of loyal Data Domain customers. The midmarket, where Data Domain is a growing supplier, is by far the fastest-developing segment of the overall market.