Latest Research From GigaOM Pro Examines Why NetApp’s and EMC’s Bids for Data Domain May Signal Further Consolidation Ahead For Storage Industry
San Francisco, CA (PRWEB) June 17, 2009 — Over the past month, data efficiency leader Data Domain has received competing bids from both NetApp and EMC. Why the sudden interest? According to new research from GigaOM Pro and TechAlpha, Data Domain, as the leader in data de-duplication, is a strategic asset for any large storage vendor due to the potential of de-duplication to permanently reduce customer demand for storage capacity.
“De-duplication breaks the imperative to grow disk capacity at the same rate as underlying data growth,” says Juergen Urbanski, Managing Director of TechAlpha. Without increased storage efficiency such as that from Data Domain, TechAlpha research indicates that IT budgets for storage would need to be up to 67 percent higher to accommodate storage growth. “Therefore EMC’s interest is largely defensive, while NetApp would gain a strategic entry point into EMC accounts.,” notes Urbanski.
“Our biggest question is why Data Domain decided to sell out in the current depressed market,” said George Gilbert, Partner with TechAlpha. “Our take on why the deal is happening now is that customer efforts to consolidate vendors and the commoditization of de-duplication technology are about to affect Data Domain more than the market realizes.”
“The mega-vendors, notably HP, IBM, and EMC in alliance with Cisco, are striving for tighter integration of virtualized resource pools across storage, servers and networking to bring down customer total cost of ownership,” says Urbanski. “They also leverage considerable commercial clout with both suppliers and customers.”
TechAlpha’s analysis also notes that NetApp is particularly vulnerable in the changing data storage marketplace, which has also seen an increase in point innovation around disruptive storage-relevant trends such as virtualization, flash solid state disk, storage efficiency and cloud computing.
“De-Duplicating the Storage Industry,” which can be found at the GigaOM Pro web site (http://bit.ly/FisJD), examines the strategic rationale of the deal for the different potential acquirers as well as for Data Domain, elaborates on what the deal means for customers, and puts Data Domain’s offerings in the context of storage-efficiency technologies and trends. This is the second GigaOM Pro report from TechAlpha, a GigaOM Analyst Network partner.
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About Tech Alpha
TechAlpha is an industry analyst and management consulting firm serving enterprise IT executives on aligning IT infrastructure and applications with business needs. Visit Tech Alpha at http://www.techalpha.com/
