Bidding for Data Domain heats up

Who knew storage was such a hot space? Data Domain CEO Frank Slootman, that's who

While I don't pretend to be an expert in the storage market, it's interesting to see how things have heated up the last few years. Companies like EMC and NetApp have built huge businesses with tremendous profit margins. After all, there's more and more business critical data to store, not to mention gigabytes, terabytes, and petabytes of unstructured data, images, videos, and so on.

An interesting battle is now taking place between EMC and NetApp; both are bidding to buyout Data Domain, a storage company that has figured out a unique method of data de-duplication that results in storage footprints that are 10 to 30 times smaller than otherwise. Data Domain has made quite a name for itself with one of the few hot IPO in the last couple of years.

[ See also: Data Domain board rejects EMC's $1.8B offer, recommends NetApp merger | Keep up with the latest open source news with InfoWorld's open source newsletter and topic center. ]

In May NetApp offered to buy Data Domain for $1.5 billion ($25 per share) -- a decent premium for a well-performing tech company with a unique technology in a large market. Further complications arose when rival East Coast storage company EMC made an unsolicited $30-per-share cash offer, effectively raising the price to $1.8 billion. Data Domain's board has now rejected the EMC offer. Of course, the NetApp deal hasn't been approved by shareholders yet, so who knows what the final outcome will be? EMC could further raise the offer, or perhaps even a company like IBM, Cisco, HP, or Dell might step into the fray.

But what's clear is CEO Frank Slootman spotted a heckuva an opportunity when he joined the company in 2003. Back then, it seemed like more of a feature than a whole company, but he's built it into a major Silicon Valley success story.

No doubt many in the storage industry are now wondering: what will be the next billion-dollar technology? And equally important, what impact could open source technology have on the storage business? Sun's ZFS has proven to be quite a draw for Solaris, but there are also more specialized storage file systems like Lustre and GlusterFS, which are starting to make inroads.

If you're using open source storage software, feel free to post a comment and let me know what you think.