I’d think that is their role. You want to know who’s solution is superior, talk to the senior engineers at tier1 service orgs. (EDS, CSC and others).
This is not unlike former presidential candidates that are brought on board in the new administration. It is fun to go back and read what they had to say just a few short weeks before.

“If EMC doesn’t acquire Data Domain, then they’ve got to continue competing against them, and that will be harder now that EMC has clearly signaled that Data Domain’s technology is incredibly, superly-duperly fantastic, and obviously must be much better, by EMC’s own assessment, than what EMC has to offer.”

Yep, happens a lot with near acquisitions. Some of the M&A artists are a little cleverer than others. How about all the positive things IBM said about Sun prior to their near acquisition? Not as much, right?

“I can think of several other companies that EMC would be better off buying, and they wouldn’t cost anywhere near $1.8B all together.”

Read the anarchists blog, a few months back he was bragging that EMC was entering another phase of M&A. This acquisition isn’t a bad one, especially for strategic reasons (owning a big chunk of a fast growing segment).

I’m not so sure. I think if they lose they lose. This affair has damaged EMC’s credibility in my eyes. A week ago, NetApp was paying way too much for Data Domain. For the past two or three years, Data Domain’s technology, according to EMC, was a flea-ridden dog, vastly inferior to EMC’s Avamar and Quantum-based offerings. Now all of a sudden it’s worth $1.8 Billion? Remind me not to ever fall into the trap of thinking that EMC’s executives might be stating an honest opinion about their competitive positions when they talk, e.g., to financial analysts, or customers, or anyone else.

If EMC doesn’t acquire Data Domain, then they’ve got to continue competing against them, and that will be harder now that EMC has clearly signaled that Data Domain’s technology is incredibly, superly-duperly fantastic, and obviously must be much better, by EMC’s own assessment, than what EMC has to offer.

Actually, I think EMC’s prior public assessment of Data Domain, that they’re a one-trick pony with an only mildly distinguished solution set, was closer to the truth, so if EMC wins, then they’ve paid wayyyy too much for what is ultimately some fairly unimpressive and by no means defensibly unique technology. EMC will sell the hell out of it, of course, so I guess in a strictly financial sense they might come out ahead, slightly, someday, but I can think of several other companies that EMC would be better off buying, and they wouldn’t cost anywhere near $1.8B all together.

That’s right, and surely EMC had hoped to quietly purchase DD.

As Mellor points out, EMC was sniffing around DD:

http://www.theregister.co.uk/2009/06/02/emc_gazumps_netapp/

“particularly since I believe you should have been aware of our interest.”

Netapp is the white knight. Appears Netapp reacted to EMC at the door.
Surely some backchannel chatter between Netapp and DD about EMC?

“If NetApp merely matches EMC’s offer they may still win the deal. Valley folks generally view them more favorably than they do EMC.”

Valley folks? Gnarly dude!

Mellor speculates that EMC would go to 2.2B and maybe somebody else 2.5B. I still stand by my assertion, win or lose EMC will come out ahead. It will be very punishing for Netapp to continue, that’s a win even if EMC loses a bidding war with Netapp. It would be good for EMC to gain DD (next gen DL3D), that’s another win.

If acquiring DDUP (Data Domain) is strategic & part of a longer range plan – why not initiate the purchase and avoid a bidding war as NetApp hoped to do? IIRC EMC has done most (all?) of its acquisitions quietly. If DDUP is worth $2B today, it was worth $2B 2 months ago. So why not move then?

No, EMC is obviously in react mode. Which is not to say their reaction is a bad one. They just aren’t out in front.

As for DDUP’s price: NTAP’s offer was just above the 52 week high, a common metric for pricing acquisitions, and one that DDUP’s board, which includes some smart VC’s, was obviously comfortable with. EMC’s offer is well above that – DDUP hadn’t been at $30 a share since 12/07 – and this morning the stock market has pushed DDUP up over $31 – suggesting some people see a bidding war.

If NetApp merely matches EMC’s offer they may still win the deal. Valley folks generally view them more favorably than they do EMC.

Robin

Who knew that an “all cash” offer could be so hard to add up?

Robin

I still agree with your analysis, however. This smacks of a knee-jerk reaction, not a carefully-considered market positioning move.

To Robin’s question about Data Domain’s value based on recent results: Data Domain as part of NetApp or EMC is a different animal. They are more than their independent sales numbers.

1. Raining on NetApp’s parade – to me they are EMC’s closest competitor, although far more narrowly focused. EMC want to remind them who’s boss.

2. An admission that EMC’s current de-dup product set isn’t actually that hot.

And does anyone have a reaction from Quantum? I bet they’re less than happy about this.