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Category: EMC
November 16th, 2009
EMC extends deduplication to corporate laptops, desktops
EMC, in its effort to reduce the use of tape for long-term storage, will announce Tuesday that it is extending its Avamar deduplication technology to laptop and desktop computers, taking it beyond networked servers and data centers.
For many businesses, data backups occur regularly for files that reside on the network. But files that are physically housed on a laptop or desktop computer don’t always have the same protections. In a statement, EMC VP Jim O’Dorisio said:
The backup and protection of critical corporate data on desktops and laptops is often overlooked. Also, as the number of mobile users grows and the amount and importance of the data stored by those users increases, organizations can face critical corporate data protection exposures. Until now, the solution or many customers has been to deploy costly point solutions that focus only on desktops and laptoips. EMC Avamar provides customers with a signle solution that can protect all corporate assets, simplify operations and reduce costs by leveraging one operational skill set for all categories of data.
Deduplication not only reduces the amount of time that it takes to back up files but also reduces the amount of space that each backup uses. After the first backup, subsequent backups only record the changes to the file instead of copying the entire file again. For example, if a user creates a Powerpoint presentation and, after it’s been backed up, goes in and adds an additional slide, then that slide is the only part of the file that’s backed up.
Of course, this doesn’t eliminate the need for tape backups but it does reduce the amount of tape storage needed if the daily backup files are duplicates of yesterday’s backup files - plus a new pie chart or two.
November 11th, 2009
Google's storage price cuts and a big missed backup opportunity
Google cut its pricing for extra storage for its Gmail and Picasa services and in a nutshell you can buy 20 GB of storage for a mere $5 a year. That’s great news and a huge missed opportunity.
Why? I’d love to back up my entire home PC for $5 a year. Instead, Google is only giving me storage for Gmail and photos (Google blog, Techmeme).
Toybox: Google offers 20GB online storage for price of a latte
How big of a missed opportunity is this? It’s potentially huge. With this mythical GDrive idea—just give me a light client that backs up everything to the cloud—Google could convince plenty of users to also become storage subscribers. But as ReadWriteWeb notes, Google is missing the mark.
Consider the following math:
- I pay $4.95 a month to Mozy, a unit of EMC via Decho, to back up my hard drive.
- That’s almost $60 a year. And there’s roughly 14 GB backed up.
- I could eradicate Mozy, a service I’m happy with for $5 a year and Google.
So what’s the hold up? Google will allow you to back up 1 TB of data for $256 a year, but can’t figure out a lightweight desktop client that would back up your entire computer. It just doesn’t make sense.
Google is willing to back up all the Gmail and photos you have lying around. Would it kill the company to back up my Word docs and other loose ends too? Thanks for the cheap storage Google, but you may want to think a little bigger.
November 3rd, 2009
Cisco, EMC, VMware announce joint integrated datacenter venture
Cisco, EMC and VMware announced Tuesday a joint venture to sell a new integrated data center product called V-Block.
Their venture, called the “Virtual Computing Environment coalition,” will sell and provide maintenance and service support for V-Block, and will combine EMC storage equipment, Cisco virtualized servers and networking equipment and VMWare virtualization technology.
[EMC statement] [Cisco] [VMWare]
Rumors of the deal — code-named “Alpine” — have been going around since September.
October 22nd, 2009
EMC: Customers have 'more comfort' about IT budgets
EMC CEO Joe Tucci said that customers are “signaling more comfort spending their IT budgets.” The company reported better-than-expected third quarter results.
The storage giant reported third quarter earnings of $298.2 million, or 14 cents a share, on revenue of $3.52 billion, down 5 percent from a year ago. Under a non-GAAP basis, EMC reported earnings of $480.3 million, or 23 cents a share, two cents better than Wall Street estimates.
Generally speaking, EMC has been well positioned in the downturn due to a focus on storage, cloud computing, virtualization and data centers — hot areas in enterprise IT. Tucci added in a statement that the company has expanded its product line while cutting costs.
Also see: VMware posts solid third quarter, tops estimates
As for the outlook, Tucci added that the company was well positioned to hit its 2009 targets. EMC expects fourth quarter revenue of $4 billion and 2009 revenue of $13.9 billion. Net income is expected to be 21 cents a share in the fourth quarter and 55 cents a share for the year.
September 14th, 2009
EMC's Tucci will stick around through 2012
The countdown to EMC’s succession transition is underway. EMC CEO Joe Tucci plans to remain an active chairman and CEO through 2012. In the meantime, may the jockeying begin for his replacement.
As noted by previous reports, EMC named former Intel executive Pat Gelsinger to be president and chief operating officer for EMC’s information infrastructure products. Gelsinger is in charge of EMC storage lines, the RSA unit, content management and Ionix IT management divisions (statement).
Gelsinger was senior vice president and co-general manager of Intel’s digital enterprise group, which includes the chip giant’s PC, server and embedded semiconductor lines.
September 14th, 2009
EMC to hire Intel exec Gelsinger
EMC is reportedly going to hire Intel executive Pat Gelsinger to run its storage product and software units, according to the Wall Street Journal.
The Journal reports that Gelsinger’s post will be effective immediately. Howard Elias will head EMC’s services division. The moves were positioned as a part of a bake off to replace CEO Joe Tucci. David Goulden, CFO, would also be a possible successor to Tucci, who is expected to leave in three years.
Meanwhile, Intel is also said to be reorganizing its executive suite after Gelsinger’s departure, reports the New York Times.
However, the three-way race to replace Tucci is more notable. It’s unclear whether EMC’s succession race will be as high profile as General Electric’s competition to replace Jack Welch a few years back.
Nevertheless, EMC is at an interesting point: The storage giant is one of the leading tech companies and is likely to either become a really big fish on the par of Cisco Systems or acquired.
My hunch is that EMC will become a big fish being an acquirer—see Data Domain—more than a takeover target.
August 28th, 2009
Iomega's NAS: Is the mainstream ready for network storage?
Is the average household ready for a network-attached storage device?
Iomega, an EMC company, sees an opportunity when it comes to mainstream consumers and a storage device that allows all of the PCs in a home to connect to the same storage drive. This week, the company launched a next-generation quad-drive desktop NAS appliance built on EMC’s enterprise-class storage technologies.
The device - officially called the Iomega StorCenter ix4-200d - comes in 2-terabyte, 4-terabyte and 8-terabyte capacities and features EMC’s LifeLine software, which is designed for cross-platform support for PC, Mac and Linux computers.
Among its features:
- Device-to-Device replication allows users to backup and copy files between the ix4-200d and any other NAS device without the need for a client computer by setting up automatic backups or with a QuikTransfer button on the device.
- VMWare-ready certification: The device is certified as both NAS and iSCSI storage for VMWare vSphere.
- Video Surveillance: Supports networked video cameras for real-time monitoring and video capture directly to the device without the need for a dedicated computer.
- Support for Apple’s Time Machine allows Mac users running OS X 10.5 or better to automatically back up their systems using Apple’s built-in software.
Network-attached storage is nothing new but those that see a future in the consumer market might just be on to something. Consider that many homes now have multiple PCs and that many households likely share music and photo libraries among the users of those various machines.
By storing things like tunes and pics, as well as important documents (archived tax returns, insurance documents and so on), on a storage device other than the PC not only makes them accessible by everyone but also allows them to be located in case a computer goes down.
Maybe these devices will also help consumers to finally take regular backing up of their data seriously.
July 23rd, 2009
EMC's second quarter better than expected; Says IT budgets stabilize
EMC reported better-than-expected second quarter results and upped its outlook for the remainder of the year. The company said that IT budgets have stabilized and customers are more confident about their visibility.
The storage giant on Thursday reported net income of $205.2 million, or 10 cents a share, on revenue of $3.26 billion, down 11 percent from a year ago. On a non-GAAP basis, EMC reported earnings of 18 cents a share.
Wall Street was expecting earnings of 16 cents a share on revenue of $3.2 billion.
EMC’s outlook was also raised. EMC projected 2009 earnings of 51 cents a share and non-GAAP earnings of 82 cents a share. Wall Street was expecting 78 cents a share of non-GAAP earnings. On the revenue front, EMC projected 2009 sales of $13.8 billion compared to estimates of $13.5 billion. Data Domain will contribute $200 million in revenue for 2009 and will be neutral to non-GAAP earnings. On a net basis, the Data Domain amounts to a less than 2 cents a share impact.
July 20th, 2009
EMC outlines where Data Domain will fit
EMC said it has acquired majority ownership of Data Domain and will complete the purchase at the end of July. EMC also outlined where Data Domain will fit in the storage giant’s lineup.
EMC, which outbid NetApp for Data Domain, said it now controls 82.1 percent of Data Domain shares after a tender offer.
In a statement, EMC said that Data Domain will lead a division focused on the latest disk-based backup, recovery and archive products. Data Domain CEO Frank Slootman will lead the division and report to Joe Tucci, EMC’s Chairman and CEO, and Frank Hauck, executive vice president in charge of EMC’s storage business.
EMC also said it plans to increase its investment in the division and build complementary technologies around it. EMC added that it expects the unit to continue to grow at double digit rates and hit $1 billion in revenue in 2010.
July 8th, 2009
NetApp, Data Domain merger nixed; EMC wins with $2.1 billion bid
NetApp couldn’t outbid EMC for Data Domain. The company said Wednesday that it wouldn’t up its offer for Data Domain and a proposed merger agreement was terminated. EMC will now acquire Data Domain for $33.50 a share in cash.
On Monday, EMC offered $2.1 billion for Data Domain in an effort to either complete a takeover or at least force NetApp to increase its bid for the third time. However, NetApp was stretching itself thin relative to EMC, which analysts estimate could have continued to bid higher for Data Domain.
Instead, NetApp will get a $57 million break-up fee from Data Domain. NetApp hinted that it wouldn’t up its bid forever on Monday when it noted that it would keep a disciplined acquisition approach.
In a statement, NetApp CEO Dan Warmenhoven said:
NetApp applies a disciplined approach to acquisitions, one focused intently on creating long-term value for our stockholders. We therefore cannot justify engaging in an increasingly expensive and dilutive bidding war that would diminish the deal’s strategic and financial benefits.
Data Domain said in a statement:
Data Domain’s board of directors has unanimously determined that the definitive merger agreement with EMC and the terms of the EMC tender offer are advisable, fair to and in the best interests of Data Domain and its stockholders.
Overall, it’s a good move for NetApp. Although the Data Domain acquisition would have been nice you can’t mortgage the company simply to thump your chest over beating EMC. Now NetApp can continue its solid business and retain cash throughout the downturn.
Here’s the history:
- EMC ups Data Domain bid as NetApp deal proceeds
- Data Domain officially rejects EMC: Will cash be king?
- EMC CEO Tucci pens dear Data Domain workers letter
- NetApp, Data Domain ink revised deal; EMC says bid still superior
- NetApp ups ante for Data Domain; Not giving into EMC easily
- EMC spars with NetApp over Data Domain
- NetApp buys Data Domain for $1.5 billion
July 6th, 2009
EMC ups Data Domain bid as NetApp deal proceeds
EMC on Monday increased its bid for Data Domain to $33.50 a share from $30 a share to $2.1 billion after NetApp’s acquisition plan received regulatory clearance. NetApp said Monday that Data Domain shareholders will vote on its $1.9 billion bid Aug. 14.
Data Domain has rejected EMC before, but money talks. EMC’s new $2.1 billion bid trumps NetApp’s $1.9 billion offer and will give shareholders something to think about all things being equal. In addition, Caris & Co. analyst Robert Cihra reckons that EMC (quote) could up the ante for Data Domain (DDUP) repeatedly. NetApp’s (quote) offer, however, would likely top out at $35 a share. Cihra writes:
Figuring no insurmountable obstacles from ongoing FTC review, we believe currently low cost/returns on cash (~2%) could enable EMC to raise its all-cash bid for DDUP to as high as $40/share and still keep the deal neutral to CY10E non-GAAP EPS (our $0.98 est) w/out even requiring revs/cost synergies. As such, we continue to expect EMC ultimately out-bids NTAP. Indeed, we see the only hurdles to EMC conceivably going much higher being the sustainability of today’s low interest rates and a hit to GAAP EPS from intangibles amortization that starts to get unwieldy (e.g., we est $0.03 already at today’s $30 bid and $0.04 at $40). This said, we est just $50mm in added revenue and $20mm opex savings could actually make DDUP accretive by up to +0.03 in non-GAAP EPS for CY2010 even if EMC upped its bid to $40. In contrast, we estimate NTAP could likely only justify raising its own bid for DDUP to ~$35 AND require more than $80mm in pre-tax revenue/cost synergies if it hoped to keep the deal non-GAAP EPS neutral for FY11.
NetApp CEO Dan Warmenhoven responded to EMC’s move:
“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.”
EMC, which extended its tender offer to midnight July 17, also said there are no regulatory hurdles from the Federal Trade Commission over a Data Domain purchase. EMC also removed a break up fee. The storage giant also said it can close a Data Domain deal in two weeks.
For EMC its offer seems to be one of the last appeals to Data Domain shareholders. NetApp also received early clearance from the FTC and said it was looking forward to a quick close on its Data Domain acquisition.
June 15th, 2009
Data Domain officially rejects EMC: Will cash be king?
Data Domain’s board of directors is recommending that its shareholders reject EMC’s $30 a share in cash bid. The company has already approved an acquisition by NetApp for $1.9 billion.
Data Domain on Monday said it reached its decision based on the following (statement):
- NetApp’s offer “represents a binding, negotiated commitment of both Data Domain and NetApp.”
- Data Domain can’t negotiate the terms of EMC’s offer. The company said:
Data Domain has been unable to engage in discussions or negotiations with EMC with respect to its offer because EMC has not yet agreed to enter into the form of confidentiality and “standstill” agreement required by the merger agreement with NetApp as one of the pre-conditions to any discussions or negotiations with a third party.
- EMC can terminate its offer anytime before the June 29 tender offer for Data Domain shares. In other words, Data Domain could drop the NetApp bid and be left out in the cold.
- Data Domain would have to pay NetApp a $57 million termination fee if it went with EMC.
What’s unclear is whether shareholders buy that rationale. The Wall Street Journal made a big deal of the culture clash between Silicon Valley and east coast companies like EMC, but in the end there’s an all cash bid vs. a stock and cash bid. If shareholders decide cash is king EMC can still make some noise. Who cares about culture when there’s cash on the line?
EMC’s response to Data Domain’s move was predictable. EMC CEO Joe Tucci said in a statement:
We believe that EMC’s $30 all-cash offer is superior and delivers to Data Domain price certainty and price protection as well as the ability to close promptly. We note that, as indicated in NetApp’s June 3rd Form S-4 filing, Data Domain communicated to NetApp that ‘price certainty and protection against fluctuations [in] NetApp’s common stock were important to Data Domain.’ We also note that on several occasions, Data Domain requested NetApp to increase the cash portion of its offer as well as the range of the collar. EMC’s all-cash offer meets all of Data Domain’s stated objectives. We do not believe that Data Domain stockholders will approve the proposed transaction with NetApp. EMC remains committed to successfully completing this transaction.
The wild card here is the stock market, which is rolling over today. The more volatile—especially to the downside—the market becomes the more appealing EMC’s all cash bid will look.
The EMC-NetApp-Data Domain merger triangle:
June 10th, 2009
Iomega: EMC's entry to be at the center of your home
A little more than a year ago, EMC acquired Iomega for $213 million. Today EMC’s master plan is coming into focus. Iomega is to EMC what Linksys is to Cisco: An avenue to become ubiquitous in your home.
EMC thinks the consumer and home office market will be its fastest growing business in the next three to four years. Ultimately, EMC will be competing with Apple, Cisco and HP to be the center of your digital home, says Joel Schwartz, senior vice president and general manager of common storage platform operations at EMC.
That fancy title basically means Schwartz has been intertwined with all of the EMC’s key storage products throughout the years. Now the game is to target the consumer. “Networked attached storage for businesses is everywhere. Why not the home?” said Schwartz in a recent conversation at ZDNet’s New York office.
Schwartz said Iomega (all resources) was acquired for its brand and channel distribution not the technology, which was a commodity. Let’s face it: The hard drive model is brutal.
Schwartz’s plan: Make Iomega’s storage software—a derivative of what is used in EMC’s enterprise systems—consumer friendly so that it takes four clicks to set up. Behind the scenes Iomega would include EMC technology from RSA and other units. Schwartz said EMC retooled Iomega’s software from scratch on the Linux kernel. The benchmark: “Whoever your partner is in life should be able to use this software in 5 minutes,” said Schwartz.
Also see: Iomega launches new low-price Home Media Network Hard Drives
After taking Iomega’s backup drive for a spin, I can verify that Schwartz was true to his four-click motto. The software bundled with Iomega’s drive—it is also bundled with the Mozy online backup service—was easy. EMC updates the Iomega firmware on the fly for new features.
But will Iomega make it to my living room? Will it back up the data—photos, music, video and bits that add up to my life? That remains to be seen, but Schwartz’s argument is interesting. The case for Iomega as a consumer brand goes like this:
- Hard drive makers—Western Digital and Seagate—are boxed in to the PC, laptop markets;
- Companies like Buffalo and Netgear will have to add too much functionality to compete in a router/backup realm;
- Cisco, Apple, HP are all vying to be the center of the home, but come at it from different angles. Cisco sees the network—Linksys—as the center of the home with Flip riding shotgun. The rub: “Cisco doesn’t know storage,” says Schwartz. HP is a PC company trying to sell consumers on a home server. HP also has printers everywhare. And Apple wants everything to run through Apple—Apple TV, iTunes and iPod.
Enter Iomega. “Data is the most important thing to the home,” says Schwartz. “These backup devices will be as ubiquitous as routers in three to four years.”
The seeds are already being planted. Iomega in the last year launched the following:
- Iomega ScreenPlay TV Link;
- Iomega ScreenPlay Pro HD Multimedia Drive;
- Iomega StorCenter ix2, a networked storage device.
Add it up and EMC sees Iomega as a storage leader in your home. It’s not a home server per se, but it functions the same. It runs in the background and protects your stuff. Meanwhile, Iomega will be a hybrid device that backs up data locally and in the cloud because “not all consumers will want to put things up in the sky,” says Schwartz.
Will this master plan work? It’s quite possible. As Schwartz notes the Iomega brand has endured through the years and generally has a positive connotation. The challenge: Marketing. I did note that EMC needs to spend some time on naming this backup drive as something that’s more home friendly. It’s not like your mom is going to run to Best Buy and say, “I must have that new network attached storage thingy.” Rest assured she’s not asking for a home server or media center either. Maybe Apple will cook up some category.
That said the concept Schwartz lays can work—and it’s not like he doesn’t know how to grow a business. EMC accelerated its home invasion with the purchase of Iomega. Now we’ll see if it can deliver. Will storage be at the center of your life?
June 9th, 2009
EMC CEO Tucci pens dear Data Domain workers letter
NetApp and Data Domain have agreed to merge in a stock and cash deal valued at $1.9 billion, but the deal is in limbo as shareholders weigh a $1.8 billion all cash offer from EMC. In between there’s a lot of campaigning for the various Data Domain interests. Enter an open letter from EMC CEO Joe Tucci to Data Domain employees.
In his letter, Tucci made the case that Data Domain employees would be better off with EMC than NetApp. He talked up the culture of EMC and said that the company knows how to integrate acquisitions well. Tucci said:
We are also a company that truly knows how to acquire companies that have become leaders in their market segments, integrate them smoothly and successfully, and then empower them to excel. We have learned by doing, and our track record is considerable. For example, over the past six years in the Silicon Valley area alone, we have acquired 11 companies, and today we have about 6,000 employees in the region. We are very mindful of culture-respecting and preserving the various cultures that made the companies we acquired successful in the first place.
The letter is interesting since Data Domain employees really have no say in the NetApp-EMC merger triangle. It’s the call of Data Domain board of directors to figure out whether to go with NetApp or EMC—even though the employees will be the ones that determine whether any deal actually works out.
In any case, EMC really can’t lose. If it wins Data Domain, EMC gets access to the fastest growing part of the storage market. If EMC doesn’t acquire Data Domain it forces NetApp to blow most of its cash on an acquisition. Meanwhile, NetApp has a lot riding on the Data Domain deal. Jeffries analyst William Choi writes:
Data Domain’s disk-based back-up & recovery is one of the fastest growing areas in storage markets. If the company is left out of this growth opportunity, it is conceivable NetApp itself could become an acquisition target. We believe NetApp could be a good fit for larger system vendors such as HP or IBM.
Here’s the full text of Tucci’s letter:
June 3rd, 2009
NetApp, Data Domain ink revised deal; EMC says bid still superior
Updated: NetApp and Data Domain said late Wednesday that they have entered a $1.9 billion merger agreement.
Under the pact, Data Domain’s board has approved NetApp’s latest offer, worth $30 a share in cash and stock. NetApp earlier in the day upped its bid for NetApp to trump an EMC all-cash offer worth $1.8 billion. NetApp originally offered to buy Data Domain for $1.5 billion.
The details:
Data Domain stockholders will have a right to receive a cash amount of $16.45 plus shares of NetApp common stock equal to the exchange ratio for each Data Domain share. The exchange ratio is equal to (i) 0.7783 shares of NetApp common stock if the “Closing Average” (as defined in the Merger Agreement) is less than $17.41, (ii) 0.6370 shares of NetApp common stock if the Closing Average is greater than $21.27, and (iii) that fraction of a share of NetApp common stock equal to the quotient obtained by dividing $13.55 by the Closing Average, if the Closing Average is (A) less than or equal to $21.27 and (B) greater than or equal to $17.41. The closing average means the average of the closing sales prices for NetApp common stock as reported on the NASDAQ Global Select Market for the 10 most recent consecutive trading days ending on the third trading day immediately prior to the closing of the first-step merger.
That mumbo jumbo basically means that NetApp may have to adjust the cash portion depending on the fluctuation of its stock price.
EMC isn’t pleased. In a statement, EMC CEO Joe Tucci said:
“EMC’s all-cash tender offer remains superior to NetApp’s proposed part-stock merger transaction. We are proceeding with our superior cash tender offer, which is not subject to any financing or due diligence contingency. We do not believe that the Data Domain stockholders will approve the merger transaction with NetApp.”
Even though Data Domain approved the NetApp deal it said it was reviewing EMC’s offer. The company requested that shareholders wait until Data Domain can can communicate with them before deciding on the EMC offer.
June 3rd, 2009
NetApp ups ante for Data Domain; Not giving into EMC easily
NetApp on Wednesday upped its offer for Data Domain to $30 a share in cash and stock in a deal valued at $1.9 billion.
NetApp offered to buy Data Domain for $1.5 billion, but then was trumped days later by rival EMC, which offered $1.8 billion. Ultimately, this battle may be determined by cash. NetApp is offering cash and stock. EMC’s bid is an all-cash offer.
The offer for Data Domain breaks down like this:
- $16.45 per share in cash;
- $13.55 per share in NetApp stock based on NetApp’s closing share price on June 2, 2009 of $19.34.
In a statement, NetApp CEO Dan Warmenhoven said:
Our strategic rationale remains the same and we firmly believe that the combination of our two companies will provide a greater opportunity and risk-adjusted value for Data Domain shareholders, customers, and partners. The complementary nature of the Data Domain and NetApp product lines will result in higher aggregate growth compared to the redundancies that would result with the EMC product line.
Warmenhoven added that NetApp’s revised offer is superior to EMC’s.
And here’s NetApp’s letter to the Data Domain board:
June 2, 2009
Aneel Bhusri
Chairman of the Board of Directors
Data Domain, Inc.
2421 Mission College Boulevard
Santa Clara, CA 95054
Dear Aneel:
On behalf of NetApp, I am pleased to reiterate our continued interest and enthusiasm for a potential combination of Data Domain and NetApp. As you know, we believe that a combination has the potential to create a combined company that is unparalleled in its position to add real value for our customers by solving their storage efficiency needs.
In light of EMC’s recently announced unsolicited proposal to acquire Data Domain, we would like to propose a revised transaction between NetApp and Data Domain which we believe offers Data Domain’s stockholders a superior combination of risk-adjusted value and transaction certainty than EMC’s unsolicited acquisition proposal.
Pursuant to the terms of the attached amendment to our existing Agreement and Plan of Merger (the “Merger Agreement”), we are proposing to revise the Merger Agreement to deliver $30 per share in total value to Data Domain stockholders, consisting of $16.45 per share in cash (before any adjustments described in Sections 2.7(b)(i) and 2.7(b)(ii) of the Merger Agreement) and $13.55 per share in NetApp stock based on NetApp’s closing share price on June 2, 2009 of $19.34. As with the terms of our existing Merger Agreement, our amended Merger Agreement would include a 10% symmetrical collar, centered on a midpoint derived from NetApp’s closing share price of $19.34. Accordingly, the exchange ratio for the stock component of the merger consideration set forth in the amended Merger Agreement would be equal to (i) 0.7783 shares of NetApp common stock if the “Closing Average” (as defined in the Merger Agreement) is less than $17.41, (ii) 0.6370 shares of NetApp common stock if the “Closing Average” is greater than $21.27, and (iii) that fraction of a share of NetApp common stock equal to the quotient obtained by dividing $13.55 by the “Closing Average”, if the “Closing Average” is (A) less than or equal to $21.27 and (B) greater than or equal to $17.41. In order to maximize deal certainty, NetApp would expect to use cash to settle the low end of the collar. Under the terms of our proposal, all other terms of the amended Merger Agreement would remain unchanged from those set forth in the existing Merger Agreement.
We believe this proposal offers Data Domain stockholders more compelling risk-adjusted value than EMC’s current acquisition proposal for several reasons. First, it offers a combination of value certainty — through the cash and the collar — coupled with the potential for long-term value upside through the ongoing ownership of NetApp stock. Second, the stock portion of the transaction consideration is expected to be tax-free to Data Domain stockholders. And third and potentially most important, we believe that a combination of Data Domain and NetApp offers clearly superior transaction certainty. Unlike a combination of Data Domain and EMC, which has substantial product overlap and which we believe will face significant regulatory challenges, a combination of Data Domain and NetApp has no meaningful regulatory risk.
We look forward to discussing the terms of this proposal in greater detail at your earliest convenience. For your convenience and to express the sincerity of our intent, we have included a signed copy of our proposed amendment to the Merger Agreement. We note, however, that this proposal and the Merger Agreement amendment attached hereto are non-binding and we reserve the right to withdraw this proposal and the Merger Agreement amendment at any time unless and until the signed copy of the Merger Agreement amendment attached hereto is counter-signed by Data Domain and returned to us without any revisions thereto. Any purported revisions to the attached Merger Agreement amendment shall not be accepted by us and shall be considered void, notwithstanding the execution thereof by Data Domain.
Sincerely,
Steven Gomo
June 1st, 2009
EMC spars with NetApp over Data Domain
EMC has swooped in Monday with an $1.8 billion, or $30 a share, offer for Data Domain. The rub: Rival NetApp already had a plan to buy the company for $25 a share, or $1.5 billion.
EMC said its all cash offer is a 20 percent premium to NetApp’s stock and cash offer May 20.
Simply put, EMC wants Data Domain to thwart NetApp’s offer—or at the very least make the acquisition more expensive.
In a statement, EMC said:
May 22nd, 2009
The time is now for Mozy and cloud backup services
Here’s my top three reasons why I’m considering a cloud offering to backup my most valuable data - my personal digital music and photo collections.
- The cloud won’t fall off the desk and become damaged.
- Kids can’t spill their juice on the cloud.
- In case of fire, those files on the cloud will still be safe when the smoke clears.
I started thinking about this when I met with Steve Fairbanks, director of Product Management for Mozy, at the EMC World conference earlier this week. Mozy, which is now owned by EMC, is an online storage and backup-and-recovery product that’s mostly targeting consumers but also attracting some interest from business customers.
The idea isn’t new. Yahoo had a product called Briefcase (which has since folded) and AOL had a similar service called XDrive (also shuttered now). Those products were probably ahead of their time - before consumers had confidence in online services and well before the broadband pipelines were fat enough to handle big uploads.
But times have changed. These days, customers pay bills online and freely type in their credit card numbers on online shopping sites, confident in the security measures that are in place. They’ve also become comfortable with online - aka cloud - services such as Web mail and social media sites.
With EMC - known for its storage offerings - as the parent company behind Mozy, there’s a level of comfort in knowing that it’s not a startup that could potentially fold if it burns through all of its VC funding. There are competitors in this space, though - such as box.net, as well as up-and-comers that have some interesting approaches, such as dropbox.
It’s not just music and photos, though. Important documents - from insurance policies to tax returns - can also be scanned and uploaded to a modern day safety deposit box on the Web. For Mozy, that opens the door wider to potential business customers as consumer products continue to influence business operations, just as it did for instant messaging services to social networks.
Mozy offers consumers 2 gigabytes of storage for free or unlimited storage for $4.95 per month. Business users have monthly, per-user and per-gig prices.
May 20th, 2009
EMC: Virtualization is ready to run the world's biggest applications
Typically, when IT departments decide to use virtualization in the data center, the big question is which workloads to virtualize. The conventional wisdom has been to avoid virtualizing anything that was too I/O-intensive, such as databases and e-mail systems.
However, EMC wants to put that idea to rest. The company, which owns virtualization market leader VMware, spent a lot of time at EMC World 2009 this week driving home the point to IT professionals that the entire data center can be virtualized.
“Virtualization is now ready to run the biggest applications,” said EMC CTO Chuck Hollis (right). “It’s ready for the biggest applications today.”
In fact, Hollis said that virtualization is already running a lot of the biggest applications for many of the world’s largest companies. America’s top auto makers are one example. Driven by intense economic pressures to reduce costs, the auto makers have recently accelerated their adoption of virtualization.
Another industry that is extensively using virtualization is oil and gas, where they have to deliver the same enterprise applications to both desktops and supercomputers. Plus, they also have a wide diversity of sites across the globe that need access to these applications. As a result, they’ve embraced virtualization to get the kind of flexibility they need on the backend.
EMC itself is committed to eventually moving its entire internal server infrastructure to virtualization, but CEO Joe Tucci said in his keynote on Monday that the company isn’t even halfway there yet. That said, Hollis noted that EMC is doing big stuff with virtualization. “We put big, hairy Oracle and Exchange workloads on VMware,” he said.
And, there are some companies that have taken the plunge and gone 100%. Hollis remarked, “We work with outsourcers that are now completely virtualized.”
Also see: Gallery: EMC World 2009
In some cases, it’s happening very quietly in the background. Hollis told the story of an IT manager who had virtualized over 3,000 servers. Hollis asked him, “How did you get your users to accept this?” The IT manager smiled and replied, “I didn’t tell them.” Apparently, no one noticed.
That’s what EMC believes will happen in nearly all cases, when virtualization is deployed correctly. Meanwhile, virtualization gives IT a lot more flexibility in managing the company’s technology infrastructure.
Hollis said that the new premise of virtualization is “architecting for choice.” He characterized virtualization to a shipping container for server workloads. This was also reflected in Tucci’s slide on virtual infrastructure:
EMC is also trying to make the case that building a virtualization infrastructure inside the firewall will enable companies to create an “internal cloud” now, and better take advantage of the opportunities presented by cloud computing (”external cloud”) in the future. It’s all conceptual and a bit of a stretch, but it’s a fairly compelling idea. Here’s Tucci’s slide on it:
For this concept to really take off, it would likely require standardization and cooperation among the various enterprise vendors, including EMC, Dell, IBM, Oracle, Hewlett-Packard, Microsoft, and Citrix. It would require more than just compatible hypervisors in the virtualization layer.
That kind of collaboration is probably unlikely. EMC is one of the more open collaborators in that group and they show no interest in reaching out. Hollis claimed that VMware currently owns 97% of the virtualization market, so he argues that it is the de facto standard. While there’s some truth to that, it’s difficult to imagine that the virtualization market won’t get a lot more crowded in the years ahead because so many of the companies listed above are putting so much emphasis on it — especially since it can now handle virtually any type of server load out there.
May 19th, 2009
EMC's Tucci: The four "next big things in IT"
In his keynote address at EMC World 2009 in Orlando, CEO Joe Tucci named “The Next Big Things in IT” as part of his vision for where both IT world and EMC as a company are headed over the next few years.
Here’s Tucci’s slide:
After the keynote, Tucci came to the press room and answered our questions for over an hour. As part of that conversation I was able to ask him about his four “next big things” and clarify a few points — especially the difference between cloud computing and virtual applications, as EMC sees it.
Here’s a summary of each of these four, in terms of how EMC is defining them:
Jason Hiner is the Editor in Chief of TechRepublic, ZDNet's sister site. Read his blog Tech Sanity Check at hiner.techrepublic.com. You can also find him on Twitter, LinkedIn, and JasonHiner.com.
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