EMC Gets Data Domain, Now What?

With its victory over NetApp in the acquisition battle for Data Domain, EMC will soon have the deduplication company in its arsenal, but it paid a high price and realizing a return on its investment will depend largely on how it executes.

By Lucas Mearian
Thu, July 09, 2009

Computerworld — NetApp Inc. said "uncle" yesterday after EMC Corp. outbid it for a second time in its quest to acquire Data Domain Inc, but some industry observers believe EMC, in its zeal to acquire the deduplication vendor, may have overpaid for the prize and could have a difficult time realizing a return on its investment.

EMC Wins Bidding War for Data Domain
EMC Raises Bid for Data Domain to $2.1 Billion

"EMC won the prom queen but now they have to build a life together. I think I could make the argument that this will be harder than the VMware or RSA acquisitions because the technology is nearer and dearer to EMC's core," said Steve Duplessie, founder and lead analyst at Enterprise Strategy Group Inc. in Milford, Mass.

"I think NetApp will be happy they didn't do this deal," Duplessie continued. "It was way too expensive, and the risk outweighs the rewards."

EMC tendered a $2.1 billion all-cash offer to acquire all outstanding shares of Data Domain's stock by midnight July 17. The revised offer topped NetApp's latest bid by $200 million. In a sense, by going that high over its rival's head, EMC was making a clear statement: You're out of your league.

"At that number there was no margin of error for NetApp. EMC can screw this deal up nine ways from Sunday and, while people may yell at them, there's no way it's going to kill EMC," Duplessie said.

In a press release issued late yesterday, EMC said that once the deal is completed, which is expected to occur before the end of July, Data Domain will help accelerate EMC's pace of expansion in the next-generation disk-based backup and archive market. That market includes data reduction strategies that are being lead by deduplication, or single-instancing, technology.

"This is a compelling acquisition from both a strategic and financial standpoint. We look forward to bringing Data Domain together with EMC to form a powerful force in next-generation disk-based backup and archive," EMC CEO Joe Tucci said in a statement. "I have tremendous respect for Data Domain's people, technology and business, and anticipate great things ahead for our respective companies, our customers and partners."

In March, NetApp originally offered $1.5 billion in cash and stock for Data Domain. But early last month, EMC -- with its deeper pockets -- came in with an all-cash bid of $1.8 billion for the company. NetApp then increased its bid to $1.9 billion. Earlier this week, EMC again countered with a $2.1 billion all-cash offer, this time sweetening the pot by removing any deal-protection provisions, including a deal termination fee. NetApp, however, retained that provision, and got a $57 million deal termination fee from Data Domain. It was a small price for Data Domain to pay, since the bidding war doubled the value of the company's stock over the past three months.

1 2 next page »

You are here: Technology Topics » $attrTitle

Most Recent Technology Topics Stories

White Papers »

Has Your Server Infrastructure Kept Pace with End User Demands?

Learn how your answer to this question compares to your peers by taking this quick poll. See how your peers are dealing with the challenge of ensuring a highly capable server infrastructure as technological shifts impact the application server platform.

Enterprise Strategy Group: The Case for a New Data-centric DLP White Paper

With increasing data growth, comes increased need for data security. The existing DLP model, with a focus on compliance/enforcement is not sufficient as the data discovery and classification capabilities are not granular enough. Read this paper to find how you can efficiently and accurately manage your risk by rapidly inventorying and classifying your data and then developing remediation workflows that support business needs.

Data Loss by the Numbers

This paper breaks down attack sources into four categories: external, malicious insiders, accidental insiders, and unknown.

Data Loss Prevention Solution for Managing E-Discovery

The rapid growth of data and technology is creating challenges for organizations as this digital data is considered to be business communications and must be preserved according the same industry-specific regulations governing the retention and discovery of emails and more traditional forms of electronic communications. This paper examines the role that Data Loss Prevention ("DLP") technology can play in helping organizations address the challenges of locating information in response to electronic discovery.

Best Practices in Data Protection - Executive Summary

This research, conducted by the Ponemon Institute, focuses on issues relating to the use of data protection solutions such as endpoint encryption and data loss prevention within the workplace.

Business Centric DLP

This report, by Jon Oltsik from Enterprise Strategy Group, examines the need for a new business-centric approach to DLP in order to align business and security requirements.

Webcasts »

Virtualization Success is a Team Effort

As greater numbers of datacenter servers transition from the physical to the virtual world, the components of virtualization success come to the fore. What scores of organizations have discovered is that success is derived from an optimal pairing of the right software platform with the right hardware platform.

Customer Spotlight: How IPC The Hospitalist Company Implemented Oracle on VMware

Have you been looking to hear about customer's experiences with the new VMware vCenter Site Recovery Manager product? View this webcast to learn about VMware customer, Navicure, and their experiences testing and evaluating the recovery manager, their progress in implementing it in their environment and their advice other customers considering using vCenter.

Quantifying the Business Value of VMware View - Webcast

Many enterprises have discovered that the use of virtualization to support desktop workloads creates a range of significant benefits. These benefits include price efficiencies, improved IT management and greater agility and choice for end users.

This VMware sponsored webcast with IDC will provide both quantitative measurement of the business value -- defined as the expected ROI -- and qualitative analysis associated with the use of VMware View™. IDC will also provide an analysis of the View Composer and ThinApp™ features of VMware View, including the business value of these solutions and an overview of how they work.

Attend this webcast to learn about:
- Challenges and barriers that might impede the adoption of desktop virtualization
- Navigating roadblocks to facilitate a strategic implementation
- Optimizing qualitative and quantitative benefits to IT and your business

Deliver Private Cloud Database as a Service with VMware vFabric Data Director

VMware recently announced VMware vFabric™ Data Director, a new database deployment and operations platform that enables enterprise IT organizations to offer database as a private cloud service. Built on top of VMware vSphere 5, vFabric Data Director enables IT organizations to ontrol database sprawl through automation and consistent policy enforcement and accelerate application development cycles with self-service database management. Attend this webcast to learn how vFabric Data Director can help you build database-as-a-service in your datacenter.

Reliable Disaster Protection with VMware vCenter Site Recovery Manager

A simple, cost-effective disaster-recovery solution for virtual environments is high on the agenda for IT organizations as they virtualize more business-critical applications with VMware. VMware vCenter™ Site Recovery Manager-the market-leading disaster-recovery product-ensures the simplest and most reliable disaster protection for all virtualized applications. VMware vCenter Site Recovery Manager provides centralized management of recovery plans, enables nondisruptive testing and automates site-failover processes.

Introduction to VMware vCenter Site Recovery Manager 5

Traditional disaster recovery solutions are often too expensive, complex and unreliable to meet business requirements. As a result, IT departments are hesitant to expand disaster protection beyond their most critical applications, largely because they are uncertain whether the quality of the protection is really worth its cost. VMware vCenter™ Site Recovery Manager 5 is the market-leading disaster recovery product that addresses this situation for organizations of all kinds. It complements VMware vSphere to ensure the simplest and most reliable disaster protection for all virtualized applications.

Newsletter Sign-Up »

Receive the latest news test, reviews and trends on your favorite technology topics

Choose a newsletter