Tuesday, June 02, 2009

Courting Data Domain

Data Domain may be the most popular company in the Storage niche in the last few days. In hard economic times it pays for customers to want to save money by increasing their storage efficiency and de-duplication makes a lot of sense if a customer can see real cost savings.

As a larger company with more large storage customers, EMC has a bigger market than NetApp does within its existing customer base. And they may be able to use DD to help their customers save money by reducing their storage requirements. Also, since many DD customers are also NetApp customers it gets EMC into the door of existing NetApp accounts.

EMC seems to have a better history of integrating companies than NetApp does, and so from a customer and employee point of view folks may want to see EMC win this battle.

During a late Monday afternoon press conference, EMC CEO Joe Tucci promised that his company would run Data Domain as a product division within EMC, and would increase its R&D investment in Data Domain technology. "We look forward to giving the Data Domain employees a warm and heartfelt welcome into the EMC family. I would like to remind everyone EMC has a good track record of integrating companies, retaining and growing key talent and achieving results," Tucci said. The CEO didn't mention the less-than-stellar integration of VMware Inc. technology into EMC, though to be fair, that acquisition has been a financial success so far.

On the other hand, NetApp does not have a good track record with at least some of its acquisitions, notably the Spinnaker Corp. deal in 2003 and the acquisition of Decru Inc. in 2006. Both companies went through a very rocky integration road with NetApp. "I do happen to believe that NetApp does acquisitions miserably," said Arun Taneja, founder and president of the research firm, Taneja Group Inc.

De-duplication is another patch on the storage resource management problem. Storage is growing and as it grows it gets more complex to manage, de-duplication shrinks the footprint but adds another layer of management.

De-duplication is not the answer to the storage resource management problem.

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