As EMC upped its bid for Data Domain to $2.1 billion Monday, storage solution providers questioned EMC's motives in its bidding war against archrival NetApp.

Solution providers, who noted that EMC already has dedupe technology similar to Data Domain's, wondered if EMC is using the bidding war to put financial pressure on NetApp and whether the strategy could backfire against the storage giant.

Netapp on May 20 said it planned to acquire Data Domain for $1.5 billion in cash and stock. Next, EMC on June 1 bid $30 per share in cash, totaling $1.8 billion, for Data Domain. NetApp followed on June 3 with a cash and stock bid of $1.9 billion.

EMC on Monday upped its all-cash offer for Data Domain to $2.1 billion.

Data Domain is the leading vendor of deduplication technology, also called "dedupe," which removes duplicate information as data is stored, backed up, or archived. This results in a significant decrease in storage capacity requirements.

Both EMC and NetApp already have their own storage dedupe technologies. In EMC's case, it has at least three types thanks to acquisitions and OEM deals.

Keith Norbie, vice president of sales at Nexus Information Systems, a Minnetonka, Minn.-based solution provider and partner to all three storage vendors, said he found it interesting that EMC increased its offer by $200 million, even though NetApp only increased its prior offer by $100 million.

"Is EMC saying, 'I'm gonna call your bluff; I'm the only adult in the room," Norbie said.

EMC's increased offer means more questions than answers, Norbie said. "The big question is, what is EMC doing," he said. "Does it want to bankrupt NetApp? Does it want to use all of NetApp's money up if NetApp continues its acquisition bid? EMC already has dedupe technology."

However, Norbie said, while EMC and other vendors have dedupe, nobody has managed to package the technology for customers the way Data Domain has done. And Data Domain does offer the best brand awareness and market momentum of any vendor, he said.

Brian McCarthy, president and owner at Sencilo Solutions, a Lake Mary, Fla.-based EMC and Data Domain partner, said he has trouble understanding why anyone would want to pay so much for Data Domain, a company that had total revenue of only $274 million for all of 2008.

"I thought it was silly at $1.8 billion," McCarthy said. "Now it's jaw-dropping. We're not talking Intel's processor technology. We're talking something that maybe 25 storage companies are already offering."

By offering so much for Data Domain, EMC risks losing out on sales of its own dedupe products, including its Disk Library and Avamar lines, McCarthy said.

"If I were a Data Domain sales rep, I'd be having a field day with this, and say, 'Why would you want to buy EMC products when EMC is trying to buy ours,'" he said.

NetApp declined to respond to EMC's newest offer, but did e-mail a statement attributed to Dan Warmenhoven, chairman and CEO of NetApp, that said, "In response to EMC's revised, unsolicited offer, the NetApp Board of Directors will carefully weigh its options, keeping in mind both its fiduciary duty to its stockholders and its disciplined acquisition strategy. We will provide an update shortly."

Both NetApp and EMC have received regulatory approval from the U.S. Federal Trade Commission.

Data Domains' Board of Directors has set a date of Aug. 14 for holding a special meeting of Data Domain stockholders to consider and vote on the merger.