Storage Informer
Storage Informer

R.I.P. Data Domain

by on May.21, 2009, under Storage

R.I.P. Data Domain

EMC logo R.I.P. Data Domain

Wow. Did anyone see this coming? I mean besides the two Dutchmen and their respective M&A teams? (Well, the Data Domain M&A team was probably one guy with a role that chiefly consisted of repeating: “Somebody, anybody, buy us. Please….

Wow. Did anyone see this coming? I mean besides the two Dutchmen and their respective M&A teams? (Well, the Data Domain M&A team was probably one guy with a role that chiefly consisted of repeating: “Somebody, anybody, buy us. Please. Pretty Please. With a cherry on top.” Complete with the ritual lighting of prayer sticks and any other shamanistic practice remotely likely to speed that outcome.)

So now that it is done–barring, I assume, the obligatory shareholder vote–what is my take on the NetApp acquisition of Data Domain?

  1. That is a lot of money to pay for a feature you already had and were giving away for free…
  2. I expect the respective sales and technical folks to get along about as well as a bunch of hungry speed crazed wolverines fighting over a meal. Not pretty. They have each spent the last two years calling each other every hateful and almost slanderous name in the book. How can they possibly turn around and kiss and make up? And how can the sales people do a complete 180 in front of a customer and say that what was complete junk a day ago is now great technology?
  3. The NearStore VTL will meet a demise faster than you can say guaranteed data loss. Secondary prediction: it won’t be missed.
  4. NetApp will struggle to make this pay, technically or financially. Their track record of acquisitions is dismal: Alacritus failed to produce any significant positive result (they sure didn’t sell very many VTLs, and see point #3 above); the Spinnaker acquisition happened 3+ years ago and they still don’t really have anything to show for it; Topio a couple years back, at $160m, and NetApp just pulled the plug on the product line; Decru can’t have paid for itself–that was $272m with virtually no payback. How will the Data Domain buy be any different?
  5. NetApp gets a company with virtually no backup experience. That may sound like an odd claim, but in my experience, DD field personnel really didn’t understand backup at all. They were really good at selling small boxes to small customers out of the trunk of their car. Coincidentally the customers happened to deploy them for backup, but darned if DD could ever really figure out how they did that. Their lack of knowledge on backup, SLAs, disaster recovery, backup windows, and all the operational nuances of backup penetrated virtually to the top of their marketing and sales organization from what I could see. So… see point #6.
  6. NetApp still has a critical case of multiple personality disorder, and if anything, it just got worse. They still can’t figure out if backup is good or bad. They still don’t know whether to say that backups are unnecessary (just use snaps) or if backup is good and snaps are bad. And if snaps are good and backups are bad (which is the message the traditional sales force has been comfortable with for years, even if it is dead wrong) how is acquiring Data Domain going to get them to change their minds or their story?
  7. So now the company with a “unified storage” product line has no less than 3 backup platforms. Each with a different OS.
  8. Data Domain was never a company to let reality stand in the way of a good story. On the contrary, they were particularly prone to irrational exuberance when spewing FUD, misdirection, and bizarrely incorrect “facts” (nobody can scale a deduplication appliance past 30 TB? really? c’mon, really?). Will NetApp rein in that sort of behavior? We can all only hope.

Final score: anybody that held DD shares prior to yesterdays announcement – 1, NetApp – 0.

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