This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

IBM and H-P, NetApp's on Your Tail

NetApp's (NTAP) $1.5 billion acquisition of Data Domain (DDUP) could shake up the storage market by giving it a launch pad into large enterprises.

The surprise deal, which was announced after market close Wednesday, is just the latest in a series of unexpected tech sector M&As such as Oracle's (ORCL) acquisition of Sun Microsystems (JAVA) and privately held Virtual Iron.

Data Domain is a leader in the development of de-duplication (subscription required) software. De-dupe, as it is known, aims to ensure that identical pieces of data are not backed up and stored, and it is one of the hottest data center technologies.

NetApp says that the deal is not purely technology-driven.

"This is about incremental market opportunity more than technology leverage," said Jay Kidd, NetApp's chief marketing officer, during a press conference late Wednesday.

Santa Clara, Calif.-based Data Domain generated revenue of $79 million in its recent first quarter, and is seen as a launch pad for NetApp to sell more of its own products.

"NetApp's planned purchase of Data Domain should provide it with a stronger competitive footing," wrote Jefferies & Company analyst William Choi in a note released Thursday. The analyst wrote that even with good products, NetApp has struggled to get into some larger customer accounts.

By using Data Domain's de-duplication technology as a "Trojan horse" to sell its own offerings, he added, NetApp could challenge bigger rivals such as EMC (EMC), IBM (IBM) and Hewlett-Packard (HPQ).

"We see a lot of cross-sell and upsell opportunities," said Dan Warmenhoven, the NetApp CEO, during a conference call late Wednesday. "We believe that a combination of NetApp and Data Domain can drive more revenue at less cost than could have been accomplished separately."

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs