Storing files on your hard drive alone is risky since hardware failures can result in losing of all your data. The best way to back up your information is to store it in the cloud--or at least somewhere other than your local system. And there are plenty of options to choose from if you go the cloud route--online storage is hardly an underserved area.
I was recently briefed by U.K.-based start-up Livedrive, which is targeting consumers and small businesses and boasts more than half a million customers.
Even though it's not marketed as a replacement for the vast and sundry applications we rely on daily, Livedrive is effectively turning the browser into an operating system. Customers can share their files between all of their computers and securely access them online from anywhere, including mobile devices like the iPhone.
This is a fairly crowded market with companies like Mozy and Box.net offering various services, but Livedrive's offering looks a lot more what we expect to see from the mythical GDrive--Google's supposed online storage system
... Read more
In the battle for supremacy among the software industry's Big Four, Cisco may be placing the biggest bets and angling for the biggest returns. Some still think of Cisco as a networking hardware vendor, but hardware is simply Cisco's beachhead into others' turf, similar to how Microsoft (desktop), Oracle (database), and IBM (everything) are using core strengths to move into adjacent markets.
If anyone needed further confirmation of Cisco's software aspirations, its forays into Linux offer a strong hint.
In what might have looked like a publicity stunt around a $100,000 prize for Linux developers, Cisco's Linux development contest was actually a major clue as to just how serious it is about becoming a leading server vendor with a global development community--and soon.
Today, Cisco announced the winners of its "Think Inside the Box" contest. The three winning applications are very interesting, but the bigger story here is what Cisco's contest just demonstrated:
Most of Cisco's 7 million installed Integrated Services Routers (ISRs) are now servers, for all intents and purposes.
The contest proved that server-side Linux developers who know C/C++, Java, or Python can now write applications to Cisco routers with little or no knowledge of routers. (Remember: the finalists only had 90 days to write their applications).
That's a development community of millions, folks. Overnight.
Still think Cisco is a hardware company? By fostering a developer ecosystem around its core router family of products, Cisco just made its hardware solutions much more valuable to its customers (and increased the stickiness of its customer relationships), and turned its routers into a big target development platform for developers.
I wrote about Cisco's contest last June as Cisco's way of paying developers to stick a finger in the Microsoft eye with a $100,000 bounty for writing Linux-based applications for its AXP (Application Extension Platform).
I clearly underestimated Cisco's ambitions.
This is doubly clear when correlated with another Cisco announcement this week about its new and expanded Cisco Developer Network, which SearchNetworking covered.
Cisco is serious about software and fostering a global developer community. As I argued in my "Software's Big Four" blog, each of these companies is entering new markets from incumbent positions of strength, unlike HP and SAP (which both have big software businesses), which are largely sticking to existing businesses.
Millions of Cisco routers already sit in data centers and branch offices around the world. They consume less power than servers. They have a smaller footprint. They're more secure. And they enable a class of applications that Cisco calls "network-aware." Just slot in an AXP blade hosting an application.
Basically routers are much smarter now, and with the right applications can be used to take control of your phones at night to monitor for burglars; manage HVAC, water, and power in your office; deliver advertising in your retail store; and much, much more.
There are two things Cisco still lacks, however, in order to make an unimpeachable bid for developers. First, it needs to move off Broadcom chips for its ISRs and add x86 chips to the mix, something that I'm hearing rumblings may well be on the way.
Second, as impressive as Cisco's outreach to Linux developers has been, the company also needs to support Microsoft's .Net/Windows developers. It's too big a market to ignore.
If Cisco can deliver on x86 and to Microsoft developers--and I think it just might--Cisco will have opened its router (server) family to an even larger development community than the already large Linux market, further blurring the distinction between routers and general-purpose servers.
The result? A formidable software company that sprouted out of a dominant hardware company. How would Oracle, Microsoft, and IBM react?
Follow me on Twitter @mjasay.
The fight to win Data Domain is over.
EMC and Data Domain announced Wednesday that the two have entered a definitive merger agreement. EMC will buy Data Domain for $33.50 a share in cash, a deal worth $2.1 billion.
Data Domain's board said it determined that EMC's offer was "advisable, fair to and in the best interests of Data Domain and its stockholders." The board is recommending that Data Domain investors tender their shares to EMC.
EMC was determined to buy Data Domain by continually outbidding NetApp over the past five weeks and is now focused on the next steps.
"We look forward to bringing Data Domain together with EMC to form a powerful force in next-generation disk-based backup and archive," EMC CEO Joe Tucci said in a statement. "I have tremendous respect for Data Domain's people, technology and business, and anticipate great things ahead for our respective companies, our customers and partners."
NetApp said it would not change its bid for Data Domain and that the two companies have ended their merger agreement. Data Domain also canceled the special stockholder meeting set for August 14, at which time investors were to vote on the NetApp proposal.
"NetApp applies a disciplined approach to acquisitions, ones focused intently on creating long-term value for our stockholders," Dan Warmenhoven, NetApp's CEO, said in a statement. "We therefore cannot justify engaging in an increasingly expensive and dilutive bidding war that would diminish the deal's strategic and financial benefits."
NetApp gets a concession prize, though--a $57 million break-up fee from Data Domain.
The bidding war was brief but active. On May 20, NetApp bid $25 a share to acquire Data Domain in a stock and cash deal worth $1.5 billion. In early June, EMC upped the ante with a $30-per-share cash offer, forcing NetApp to boost its bid to match. However, EMC promoted its deal as superior because it didn't contain some of the contingencies of NetApp's proposal.
Data Domain seemed intent on choosing the NetApp bid, prompting a couple of lawsuits against the company over its failure to consider EMC's offer.
Finally, on Monday EMC upped its price to $33.50 per share, which proved to be the winning bid.
EMC has proven tenacious in trying to outbid NetApp in the battle to buy Data Domain. But NetApp isn't going down without a fight.
After Monday's announcement that EMC had upped its offer for Data Domain to $33.50 a share, NetApp countered with two responses, the first noncommittal but the second quite clear.
The first word from NetApp:
"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," Dan Warmenhoven, chairman and CEO of NetApp, said in a statement. "We will provide an update shortly."
That update came later Monday as NetApp affirmed its intention to acquire Data Domain, still asserting its bid as "superior." The company also announced that the Securities and Exchange Commission has declared NetApp's offer as effective, clearing the way for a shareholder vote.
Additionally, the Federal Trade Commission has granted the merger agreement early clearance. This means the FTC will not conduct any further reviews of the merger, allowing NetApp's acquistion of Data Domain to close on a timely basis if approved by stockholders.
"We are pleased to have passed these important milestones, which we believe set us on course for a clear and timely path to close," said Warmenhoven. "We continue to believe that our offer is superior to the unsolicited offer from EMC."
Data Domain's board has set up a special stockholder meeting for August 14 to vote on the merger.
The fight to own Data Domain started on May 20 with NetApp's original offer of $25 per share. In early June, EMC volleyed with a higher per-share bid.
Despite lawsuits against Data Domain over the agreement with NetApp, the two companies seemed determined to complete their deal. Now the ball is back in EMC's court.
The stakes have been raised yet again in the ongoing saga to acquire storage vendor Data Domain.
EMC announced Monday that it has upped its bid for Data Domain to $33.50 per share in cash, a deal worth about $2.1 billion. The company said its all-cash offer is "clearly superior" to NetApp's proposal of $30 per share in cash and stock.
In a letter to Data Domain Chairman Aneel Bhusri, EMC further strengthened its claim by stating that it has removed all deal-protection provisions from the offer as a way of maximizing value for Data Domain stockholders. The company urged the Data Domain board to do the same.
"It was questionable agreeing to deal protections in your initial agreement with NetApp when you knew of our interest in acquiring the company," EMC CEO Joe Tucci said in his letter to Bhusri. "There is no basis for continuing with them now."
Unlike NetApp, EMC's proposal isn't subject to any financing, due diligence, or regulatory contingencies. EMC will use existing cash to pay for the transaction.
EMC also said it's ready to close the deal within two weeks--almost a month sooner than NetApp. The $33.50-per-share offers expires at midnight EDT on July 17.
"Over the past several weeks we've received strong support from many Data Domain stockholders and customers, validating our belief that EMC is Data Domain's best choice," Tucci said in a statement. "With regulatory requirements now fulfilled, and in light of the clearly superior proposal we submitted to Data Domain's Board of Directors today, we expect Data Domain to sign our definitive agreement that will deliver superior value in cash to the Data Domain stockholders in as little as two weeks."
The skirmish to take over Data Domain has been playing out since May 20 with NetApp's original offer of $25 a share.
In early June, EMC jumped in and started a bidding war. In mid-June, two lawsuits were filed against Data Domain over its apparent reluctance to consider EMC's offer.
Speculation has also run rampant as to why EMC and NetApp are duking it out to win the hand of Data Domain.
The corporate soap opera between Data Domain and potential suitors NetApp and EMC has a new episode.
Two law firms have launched class action suits against the board of Data Domain, alleging that the process used to accept NetApp's offer may not have been fair and open.
Attorneys at Bernstein Litowitz Berger & Grossmann filed suit in Delaware on June 12 on behalf of the Police and Fire Retirement System of the city of Detroit and "similarly situated shareholders of Data Domain," according to the firm's press release.
The suit contends that Data Domain's board breached its responsibility to shareholders by refusing to negotiate with EMC and for agreeing to sell Data Domain to NetApp without taking steps to maximize the price paid to Data Domain's shareholders.
"Data Domain's board of directors violated their fiduciary duties by approving the original and the restructured deals with NetApp, both of which give NetApp an improper bidding advantage in the form of a termination fee, a no-shop/no-talk provision and matching rights," said the Bernstein Litowitz Berger & Grossmann law firm in a statement. "The board granted each of these deal protections before any value-maximizing process took place, in a blatant effort to ensure that their favored merger partner is Data Domain's ultimate acquirer."
The firm has asked the court to issue an injunction preventing Data Domain and NetApp from consummating their merger.
Separately, law firm Levi & Korsinsky filed its own suit in California last week against Data Domain's board, with similar allegations.
"Under the terms of the proposal, Data Domain's shareholders would receive $30 to be paid in a combination of cash and NetApp stock," said Levi & Korsinsky in a statement. "In addition, NetApp offered positions on its board to certain Data Domain officers and there are rumors that the Data Domain CEO Slootman could be the next CEO of NetApp. This raises questions as to whether the sales process conducted by the board was fair and open."
A spokesperson at Data Domain contacted by CNET News said the company had no comment on the lawsuits.
The battle for Data Domain started on May 20 when NetApp offered $25 a share to acquire the company. On June 1, EMC jumped in with a $30-per-share bid. NetApp then countered with a similar offer. Since then, the market has speculated on why Data Domain is in such hot demand, causing these financial fireworks.
Much drama has ensued since NetApp announced the intended acquisition of Data Domain on May 20 for the whopping sum of $1.5 billion.
EMC countered with a $30-per-share offer valued at $1.8 billion. NetApp then raised its offer to $30 a share, valued at $1.9 billion. Data Domain essentially said, "Thank you, EMC, but we like the new NetApp offer more than yours." EMC then claimed that it had been unfairly shut out of the bidding process and appealed directly to Data Domain employees.
NetApp countered with a claim that EMC's potential acquisition of Data Domain would fail a federal regulatory review, a claim that EMC has rebutted as it considers shoveling more cash into the fire to make its proposal more attractive.
To its suitors, Data Domain is now reportedly worth $1.9 billion. To give you some perspective on that figure, Oracle recently agreed to acquire Sun Microsystems for $7.4 billion. A $1.9 billion acquisition would mean that Data Domain is now worth about 24 percent of that number, yet its 2008 revenues of $274 million are a tiny fraction of the $13 billion Sun took in sales revenue during 2008. Here's another relevant data point: EMC acquired VMware for a mere $635 million.
Deduplication is the storage world's new killer app. It's the great shrinking machine. Think of the old Steve Martin "let's get small" routine. It shrinks big data down to a small fraction of its original size--way more than is possible with the more common data compression routines. Why is that process now worth billions of dollars?
Most IT shops are moving away from using tape as their primary backup media in favor of disks. Deduping makes this migration economically viable by greatly reducing the backup data footprint on disk arrays by factor of 20 to 1, on average. You can't do that with tape. Nor can you get the input/output performance of disks from tape.
But that's not all that deduping does. It can be run against primary data storage streams to reduce the data footprint within expensive primary storage arrays. NetApp, among other vendors, supports this. Running it here may amount to the functional equivalent of buying another array, given the capacity that's saved as a result. When IT budgets are constrained, and storage is one of your top budget priorities, that's a big deal.
One can also dedupe archival storage, making the disk a repository for archival data that may need fast accessibility on a periodic basis--like when your corporate attorney needs to find exculpatory e-mails from three years ago and needs them yesterday.
So now everyone has to dedupe. Every major storage vendor, from EMC to Hewlett-Packard to IBM, now offers at least one dedupe option of the many that are now available, including the in-line and post-process variants. IBM, for example, offers four options.
In spite all its high-profile competition, Data Domain has been the acknowledged leader in integrating deduplication into the backup process. It offers disk-based deduplicated storage arrays for heterogeneous backup environments, and it leads all contenders in this space, in terms of market share, by a wide margin.
Does a leading position in a killer app justify a $1.9 billion valuation for a relatively unknown company mining a niche storage opportunity? Stay tuned. The executives at EMC and NetApp hate to lose, and EMC may yet win the heart of the fair maid named Data Domain.
The storage software industry has seen its first quarterly sales decline after more than five years of solid growth, according to a report from market researcher IDC.
First-quarter 2009 revenue for the industry sank 5.2 percent to $2.8 billion from the previous year. The slump has impacted several key vendors, including Hewlett-Packard, EMC, and IBM, all of which sell storage software to enterprise clients.
"The combination of the normally slow first quarter for most companies with the continued economic climate was displayed in this quarter's results," Michael Margossian, research analyst for storage software at IDC, said in a statement. "A majority of companies displayed either negative or very low year-over-year growth."
The software storage industry includes areas, or submarkets, such as data protection and recovery, archiving, data replication, and storage device management. Most of those segments were battered by the weak business climate.
"On a yearly basis, a majority of the sub-markets declined from the previous year's first quarter," Laura DuBois, IDC's research director for storage software, said in a statement. "Predominantly affected were the Device Management, Replication, and Infrastructure markets, all segments closely aligned with the storage systems themselves."
Among the top five players, HP was hit the worst with quarterly sales of $97 million, a 21.5 percent drop from $123 million the previous year. EMC watched its revenue fall 14.5 percent to $612 million, from $716 million a year earlier. Only Symantec eked out a small gain, with sales of $531 million, 2.5 percent higher than the year-ago quarter's $518 million.
The sales decline for the major companies has rippled through the entire software storage industry. But IDC expects the market to bounce back once the top five recuperate.
"The overall Storage Software market was pulled down by the underperforming large companies that make up a bulk of the submarkets," said DuBois. "Once they start to recover, they will bring the entire market up with them."
The software report follows IDC's accounting late last week on the first quarter's poor performance in the disk storage business.
The disk storage market is the latest casualty of the recession. Worldwide sales for storage vendors in the first quarter of 2009 dropped 18.2 percent to $5.6 billion from $6.8 billion a year ago, according to a report from research firm IDC.
The market includes vendors such as IBM, Hewlett-Packard, and Dell, which sell complete disk storage systems to enterprise customers. IDC blamed the decline on the overall downturn in total server sales.
Among the top five vendors, HP fared the worst, hit with a 25.8 percent drop in sales to $975 million from $1.3 billion a year ago. IBM saw its disk storage revenues sink 21.7 percent $811 million from $1 billion. Dell was next on the list with sales of $660 million, 17.2 percent lower than $797 million the previous year.
The news wasn't all bad, noted IDC, since total disk capacity used by companies worldwide shot up 14.8 percent to 2,146 petabytes.
"The disk storage system vendors are really seeing the impact of the global economic downturn in the first quarter revenues," Steve Scully, research manager for enterprise storage at IDC, said in a statement. "However, while total revenues declined year over year, the overall storage capacity shipped continued to grow. These contrasting results are due to a combination of currency implications, lower overall sales, shifts in product mix, and aggressive pricing actions."
Despite the sour economy, companies still need disk storage, notes the report, but are opting for systems in the low and middle price tiers.
"Entry-level price bands ($0K - $14.99K) showed 9.9% year-over-year growth and the midrange price band ($15K - $49.99K) was flat year over year," Liz Conner, an IDC research analyst, said in a statement, "supporting IDC's belief that storage products are still in demand, with customer spending trending towards more modular, price point options."
The disk storage market is in the midst of another battle, with vendors EMC and NetApp fighting to acquire Data Domain. A top supplier of deduplication systems, Data Domain has been one of the few companies in its industry doing well despite the global downturn.
The report was put together by IDC's Worldwide Quarterly Disk Storage Systems Tracker, which analyzes the global disk storage market each quarter.
The battle to buy Data Domain is in full swing.
Late Wednesday, NetApp upped its bid to acquire Data Domain to $30 a share after EMC jumped in earlier in the week with its own buyout offer. On the surface, both proposals seem similar. But EMC claims its bid is superior and predicts Data Domain shareholders won't approve the NetApp agreement.
The initial buyout agreement between NetApp and Data Domain was unveiled on May 20. NetApp's offer then was $25 a share, or $1.5 billion total, a deal that seemed to sit well with Data Domain. But on Monday, EMC raised the stakes with its own offer for Data Domain of $30 a share, a total price tag of $1.8 billion. On Wednesday, NetApp then parried EMC by raising its own proposal to $30 a share.
Though both bids rest at the same price per share, EMC claims its offer isn't subject to the same conditions and limitations as the NetApp offer and that it's a better deal for Data Domain shareholders.
"EMC's all-cash tender offer remains superior to NetApp's proposed part-stock merger transaction," Joe Tucci, EMC's chairman, president, and CEO said in a statement. "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."
Data Domain is a top provider of deduplication storage systems, which let enterprise customers more easily back up data across different systems. Despite the global recession, Data Domain is doing well compared to its competition. First-quarter revenue for 2009 jumped 50 percent over the previous year, thanks in part to a surge in new customers.
EMC says it wants Data Domain for its strong management and sales teams and to complement its own backup and storage technology. EMC has been in a buying mood the past few years, having picked up Iomega and start-up firm Pi last year and Network Intelligence in 2006.
Could the shopping spree end here? Data Domain seems to prefer NetApp as suitor. Its board of directors has already unanimously approved NetApp's revised transaction agreement.
"We are pleased with the revised terms of NetApp's acquisition offer," Frank Slootman, president and CEO of Data Domain, said in the company's statement Wednesday, "and feel it will provide great value to our shareholders and customers."
The NetApp deal is expected to close in 60 to 110 days, subject to regulatory approval. EMC's current tender offer will expire at June 29 unless extended.
