What a love triangle!

When NetApp made a $1.5B bid for Data Domain, I was shocked. When EMC announced a $1.8B bid to take the deal away from them, I almost hit the floor.  Click Read More to see more.
Data Domain’s got to be feeling like the cock of the walk here.  They should be strutting around with their heads up high, comb and wattles a’flarin. (I’m at Storage Decisions Chicago right now, and that is exactly what they’re doing.)  Their stock price continues to climb.

In contrast, NetApp & Quantum have got to be feeling pretty sad.  (Again, the booth people at their respective books looked just that way yesterday.  We’ll see how they do today.)  Both their stock prices took a tumble in after-hours trading, and have continued their drop today.

There’s no way NetApp’s going to outbid EMC here.  Everyone already thought that 1.5 was too much for NetApp to pay, given their track record with acquisitions.  How are they going to outbid a 1.8 ALL CASH bid?  So methinks they’re back to square one.  (PSST: Hey, NetApp!  If you’re looking to acquire an intelligent disk target that can actually scale to the needs of your enterprise customers today, take a look at FalconStor & SEPATON.  Both of their throughput and capacity numbers make Data Domain’s numbers look puny.  They’re three-six times faster, and that’s just the current config. If you need more, all they have to do is certify it.  The code supports it.)

As to Quantum, this is quite a bit of egg on their face.  They’re like a girl that’s been dating one guy faithfully, only to have that guy introduce them to his new fiancee’.  Aaawwkkward!  Yes, EMC’s bid for Data Domain signals a very public lack in confidence in their current target dedupe offering.  I mean, DDUP’s worth almost $2B, but Quantum wasn’t worth $30M plus their loans?  That’s got to hurt.  (Before EMC loaned them the $100M and advanced them another $50M, that’s what they’re market cap was.  EMC’s loans caused the price to shoot up.)

As to why EMC want’s Data Domain so badly, I think it’s obvious.  They’ve been (somewhat) quietly buying up the market share of this new market by (almost) giving away their Avamar and 3DL products.  (You simply wouldn’t believe some of the deals I’ve seen.)  At the rate they were going, they were going to spend a couple of billion to do that anyway.  If they get Data Domain, they get number one position over night.

What a day to be at Storage Decisions.

----- Signature and Disclaimer -----

Written by W. Curtis Preston (@wcpreston). For those of you unfamiliar with my work, I've specialized in backup & recovery since 1993. I've written the O'Reilly books on backup and have worked with a number of native and commercial tools. I am now Chief Technical Evangelist at Druva, the leading provider of cloud-based data protection and data management tools for endpoints, infrastructure, and cloud applications. These posts reflect my own opinion and are not necessarily the opinion of my employer.

One thought on “What a love triangle!

  1. bbahnmiller says:

    And now today NetApp ups the bid… $30/share, cash and stock. EMC’s position regarding Quantum is definitely a mixed bag. As a user of a DL3D, it kind of makes me wonder.

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