Storage

04:34 PM
Tom Trainer
Tom Trainer
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Round And Round It Goes

Where it stops, nobody knows... The recent events in the on-going saga of the purchase of Data Domain certainly have a lot of heads spinning. While many thought the FTC may have been a worry for EMC in its acquisition efforts, they may have actually cleared the way for a further bidding war.

Where it stops, nobody knows... The recent events in the on-going saga of the purchase of Data Domain certainly have a lot of heads spinning.  While many thought the FTC may have been a worry for EMC in its acquisition efforts, they may have actually cleared the way for a further bidding war.

With EMC raising the bid to $33.50 per share, and removing deal restrictions, many pundits are calling game over - EMC wins.  I say, hold your horses.  There is no disputing EMC has deep pockets; however, I believe Data Domain employees may be more loyal to NetApp, as reportedly greater than 30% are NetApp alumni.

As a general rule of thumb, you have deep pockets because you spend your money wisely.  To me, there are still some unanswered questions.  I'm wondering: is this a purchase of want versus need, or just not to lose to NetApp?  This could be a case similar to VMware where EMC believes it can dominate the market for this specific technology.  Frankly, the acquisition of Data Domain is a smart move by either company as it is clearly a market expander.

Before VMware was acquired by EMC, it was in serious talks with Symantec.  I heard from several company employees that when it came right down to it, and even after the press releases were written, both companies decided not to go through with the deal.  Sources from both companies told me that, in the end, it wasn't about the money - although Diane Green would have made plenty - it was about personalities and culture fit.  In the long view, it seems that all has worked out well for EMC, Symantec, and VMware.  However, given Data Domain's hedging, could this be another example of a cultural misfit - and if so, can it be surmounted should EMC wind up winning this bidding war?

Shining through all the rhetoric is that Data Domain is not racing down the isle and to the alter with EMC and recommending to shareholders to take the EMC deal.  This fact just cannot be ignored.  For the sake of Data Domain employees, and their futures, it is paramount for both EMC and NetApp to continue to offer strong words of support and that the victor delivers on that support.  After all technology is great, but without the people behind the technology it can rapidly vanish into thin air.  I'm sure the last thing anyone wants is to dedup Data Domain personnel.

Tom Trainer is founder and president of analyst firm Analytico. Prior to founding Analytico, Trainer was Principal Storage Product Marketing Manager at Red Hat, and Director of Marketing at Gluster prior to its acquisition by Red Hat. Tom has worked as managing senior partner ... View Full Bio
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