Posted by: Dave Raffo
NetApp came up short to EMC in its bid for Data Domain, but people in the storage industry expect there will still be an acquisition in NetApp’s future. In the swirl of speculation, NetApp is considered both a prime target as well as a buyer on the prowl.
As the Data Domain situation shows, NetApp isn’t sitting around waiting to be bought. And there are more companies that NetApp can buy than larger companies that would take on an acquisition the size of NetApp. So it’s likely that NetApp will make its next move as a buyer, and it has several options if it wants to replace Data Domain with another data protection/deduplication supplier. There are even a few companies who can give NetApp what Data Domain can’t – namely, backup software or global dedupe.
Here’s a list of candidates we think NetApp might pursue, in order of likelihood, with the advantages and disadvantages of each:
Pros: Gives NetApp an instant storage software business in addition to deduplication. Its technology is well respected, with little if any overlap with current NetApp products.
Cons: CommVault’s market share is tiny compared to industry leaders such as Symantec and EMC, especially in large enterprise accounts. More than 10% of CommVault’s revenue comes from OEM deals with Dell and Hitachi Data Systems, who may give CommVault the boot if it goes to their storage rival Netapp.
Pros: Would bring NetApp solid VTL and continuous data protection (CDP) software as well as second-generation deduplication, including global dedupe.
Cons: FalconStor’s dedupe reputation took a hit when its VTL partners EMC and IBM went in other directions for dedupe. FalconStor gets at least 20% of its revenue from EMC VTLs, and a big chunk of its business comes from iSCSI — which probably isn’t of much interest to NetApp because it offers iSCSI on its current storage platform.
Pros: solid dedupe IP and patents acquired from Rocksoft (through ADIC), and a dedupe-based VTL platform that Quantum has improved after a rocky start. EMC has been pushing Quantum on the market as its OEM dedupe partner for nearly a year.
Cons: comes with baggage – a lot of debt from its own acquisitions, and a lot of tape. For all its talk about dedupe, Quantum still gets most of its revenue from tape. Quantum can also be seen as an EMC castoff in the wake of its Data Domain buy.
Pros: global dedupe and a VTL platform that can help NetApp fulfill its goal of becoming more of an enterprise play.
Cons: NetApp might want more of an established company. Also, Hewlett-Packard OEMs Sepaton and could outbid NetApp to prevent Sepaton from getting away.
Pros: startup has built a solid business in the midrange, primarily as a lower-priced option to Data Domain.
Cons: Can be seen as Data Domain-light, and would likely require much investment to become an enterprise play.