NetApp Adds NAS Based Disk Back-up to Portfolio

by Sonal Desai    May 27, 2009

NetApp, which has been scouting for suitable alliances’, has finally zeroed in on Data Domain that specializes in disk-based heterogeneous back-up. The alliance will now offer enterprises an alternative to minimize their reliance on tape.

Till now, NetApp used to offer through its Virtual Tape Library (Netapp Nearstore VTL product) only.

Data Domain has a strong market share in data backup, disaster recovery market by using de-duplication. Even during recession, the company has been growing at 25% in the hardware de-duplication market. It is a market leader with almost 55% of the market share.

However, Data Domain lacks the customer base of large vendors and has been facing market challenges competing against Quantum.  By acquiring Data Domain, NetApp can now offer NAS-based disk back-up. This acquisition also makes Netapp the only company that has inline and process de-duplication technology.

So what NetApp has done is add another product line and push the share through its existing channel partners. Moreover, it has acquired prime assets for just $1.5 billion, said T. R. Madan Mohan, managing partner at Browne and Mohan.

"Till now, NetApp, by using VTL, could concentrate only on customers relying on tape-based back-up. Now with the acquisition of Data Domain it can look at customers seeking non-tape back-up and single instance storage. NetApp used to be strongest in nearline and archiving only when the primary storage device was NetApp, but now with Data Domain products it can compete in mixed-vendor primary storage markets also," Mohan said.

Despite these synergies, there could be overlaps in the sense that both vendors had virtual tape libraries. Explaining the difference, Mohan said while Data Domain’s appliance does not integrate with back-end tape, NetApp’s does. Going forward, there would be rationalization as one emerges as primary storage and the other as secondary. There’s no overlap in terms of de-dupe on primary storage device because Data Domain has only concentrated on data archiving and recovery.

Also, Data Domain products are suitable for high duplication ratio markets such as BFSI, e-governance solutions, healthcare, pharma & CRO, higher education, military and defence establishment,  oil & gas, something that NetApp will certainly leverage on to tap new markets and customers.

NetApp’s new-found strength can have the bosses at EMC worried. We will not be surprised if they start scouting for acquisition targets, and Quantum is a very good one.

 

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