In the wake of the news that EMC and NetApp are bidding close to $2 billion (yes, you heard that right, billion) for backup deduplication specialist Data Domain, a whole lot of people are starting to ask, “just what is this deduplication stuff anyway?” On this very blog, readers are clicking on the “Deduplication” tag as never before. A sign, we think, that people are seeking information about this all-important topic.
The battle for control of Data Domain is no coincidence or random event. It’s based on the immense and growing value in deduplication technology, which has the ability to reduce overall storage costs (CapEx and OpEx) like few other advancements. Simply put, reducing the space it takes to store files is perhaps the best way to cut costs as data that must be stored continues to skyrocket. Ultimately, as deduplication makes its way into the primary storage arena–where this blog’s parent Ocarina Networks is a pioneering player–it is becoming a game changer.
As Murli Thirumale, CEO of Ocarina Networks and an occasional contributor to this blog put it in a recent post:
“As we’re now recognizing, those in the storage industry who dismissed Data Domain’s backup storage reduction as ‘just a feature’ were proven wrong. It was a product AND a company. Our belief is that online storage optimization is both a feature and a product. We also believe the market for this capability is very horizontal and very large and can likely support 1-2 public companies in the future.”
Carter George, lead writer on this blog and VP Products at Ocarina (and a storage industry veteran), also had the following to say:
“The Data Domain technology gives NetApp an immediate leadership position in Dedupe for Backup, but the DDUP technology will not translate easily in to dedupe for primary, where NetApp Dedupe already exists in the filer.
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At $25 a share, NetApp paid a 40% premium on yesterday’s closing DDUP price of about $18/share. This is a great comparable for not only the excitement around data reduction, but also the difficulty of doing it right. In short, if it was easy to copy, then NetApp would not have paid the premium.”
Whatever happens to Data Domain–whether it becomes a part of NetApp, EMC, some other acquirer, or remains on its own–this story is a huge validation of this particular business area.
