EMC Picks Up Avamar

ORLANDO, Fla. - Storage Networking World (SNW) -- EMC today moved to strengthen its disk-backup technology by acquiring data de-duplication specialist Avamar for $165 million.

Avamar was among the pioneers of the de-duplication technology that is becoming popular in virtual tape library (VTL) products and is catching on among customers looking to reduce or eliminate the amount of data backed up on tape. (See De-Dupers Demand Disk Mindset and DMV Green Lights Remote Backup.)

De-duplication software only transmits data that has changed since the last backup, greatly reducing the amount of data that needs to be stored and moving it faster over the network. (See Insider: De-Dupe Demystified.) Backup vendors Asigra and Avamar and VTL startup Data Domain were early players in de-duplication, although the ranks of vendors with that technology have swelled in recent months.

EMC chief development officer Mark Lewis sees Avamar's Axion software as a major addition to its Legato backup software platform.

When Symantec acquired backup market leader Veritas last year, EMC hoped to capitalize on the transition by moving into the No. 1 spot. Not only did it fail to catch Symantec, but EMC has lost ground to IBM in overall storage software as well. EMC's backup and recovery software -- which includes Legato and other products -- grew a mere three percent year over year last quarter."This changes the game in backup," Lewis says of the Avamar deal. "We've done OK with Legato, but we haven't been No. 1. We like to be No. 1 in a market."

Avamar claims more than 400 customers and was considered a prime acquisition target given the rise in popularity of de-duplication in recent months. Sources close to the firm say it was courted by other large vendors, including Cisco.

EMC's Centera archiving system does a form of de-duping known as single instance storage, but it is not as granular as Avamar's and does not approach Avamar's compression rate.

This has been a big year for de-duplication product launches and acquisitions. Diligent Technologies began shipping its ProtectTier software and landed a reseller deal with Hitachi Data Systems. ADIC -– now part of Quantum -– acquired Rocksoft for $63 million in March. (See ADIC in De-Dupe Deal.) Symantec launched its PureDisk remote office backup software based on technology acquired from Data Center Technologies (DCT) in 2005. (See Symantec Dips Into De-Dupe.) FalconStor and Sepaton have de-duplication software in beta for their VTL products, and Quantum expects to incorporate de-duplication into its product line by the end of the year. (See FalconStor Plots De-Dupe Debut.)

Lewis says EMC had been actively looking to acquire de-duplication technology for a year. He focused mainly on Avamar, Data Domain, Diligent, and Australian firm Rocksoft. He says Avamar's advantage is compressing data "at the edge" -– or before writing to the storage system, as opposed to compressing it during the act of writing to the storage system. Rocksoft's technology was closest, but it was a long way from having a shipping product when ADIC bought it."Rocksoft was the only other technology we really liked, but $63 million for patents?" he says. "We got a much better deal."

The knock on Avamar is that its software was developed to replace traditional backup software, where VTLs are designed to work with backup applications. (See Avamar Rolls the Tape.) Lewis says he's not worried about selling software that might threaten Legato's installed base.

"Will we lose some tape backup [sales]? I hope so," he says. He also says EMC will not use the Avamar technology with its VTL products because he believes VTL is a transitional step for customers who want to get away from tape without changing their backup process. An EMC spokesman said de-duplication is on the roadmpay for its VTL, however, probably through the FalconStor software it run on the product.

EMC will offer Avamar's 101 employees positions when the deal closes -– probably within a month. CEO Ed Walsh and founder/executive VP Jedidiah Yueh say they will join EMC although their titles have not been determined.

Avamar picked up $51 million in funding since 1999, and sources say it was on track for just over $20 million in revenue this year. EMC and Avamar executives agree that number could have been higher, but large organizations are reluctant to trust protection of critical data to a startup."One thing we were missing was reach and resources," Walsh says. "I think that problem's solved."

— Dave Raffo, Senior Editor, Byte and Switch

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