NetApp To Buy Data Domain For $1.5 Billion

Data Domain, which once ran a marketing campaign with the message "Tape Sucks, Move On," makes deduplication storage appliances that archive data for storage outside the primary production environment. Although tape traditionally has been used for this purpose, Data Domain offers a better alternative for companies with multivendor storage infrastructure, said Jay Kidd, chief marketing officer at Sunnyvale, Calif.-based NetApp.

Data Domain has built a thriving business by targeting organizations that want to move away from tape-based storage, and NetApp expects the deal to help both companies expand their market reach, Kidd said.

"One reason we're excited is that there is fairly low overlap between the customer bases," Kidd said. "This acquisition is a growth opportunity for both companies."

Data Domain, a Santa Clara, Calif.-based company with 825 employees, will benefit from NetApp's global market coverage and particularly its strong business in Europe and Asia as well as in key enterprise accounts, Kidd said.

Under the deal, Data Domain will operate as a product line within NetApp's product operations organization, and Data Domain's sales team will be integrated with that of NetApp, Kidd said.

There's already a "fair amount of overlap" between NetApp's and Data Domain's channels, which suggests that the integration of the two partner communities will be a straightforward process, Kidd said, adding that both companies' partners will get access to both product lines.

NetApp may be thrilled at the prospect of acquiring Data Domain, but it's paying a hefty price: The cash-and-stock deal amounts to $25 per share and represents a 40 percent premium over Data Domain's share price at the close of Wednesday trading. The deal is expected to close in next two to four months.