NetApp to pay $1.5 billion to aquire Data Domain

NetApp Inc. said it has agreed to acquire top data de-duplication vendor Data Domain Inc. in a cash and stock deal valued at $1.5 billion.

In a conference call following the initial online announcement, NetApp Chief Marketing Officer Jay Kidd said the company will focus on selling the Data Domain technology into “multi-vendor environments.”

NetApp's own A-SIS data de-duplication technology will no longer be sold as a standalone product, but willl be offered only as part of the Data OnTap operating system that runs the company's network-attached storage arrays. The de-duplication technology will continue to target primary storage environments.

The Data Domain de-duplication appliances are point products that are installed between primary storage arrays and tape archives or virtual tape library disk subsystems.

Data de-duplication, or single-instance storage, involves the elimination of redundant data. Hash algorithms mark data blocks with unique numbers, and those numbers are compared so that duplicate pieces of data can be left out of the storage process.

NetApp CEO Dan Warmenhoven, said he expects the deal to close in 60 to 120 days. “This combination is a great opportunity for both NetApp and Data Domain,” Warmenhoven said. “NetApp has the distribution channels and international reach to offer Data Domain products to more customers, accelerating growth and market adoption.”

Santa Clara, Calif-based Data Domain has 825 employees and reported $274 million in revenue last year.

NetApp said the Data Domain product group will become part of its product operations organization, while its sales organization will be integrated with the NetApp sales operation.