Investors eagerly bought shares of electronic data backup company Data Domain ( DDUP) on Wednesday, its first day of trading as a publicly listed company.

Data Domain's shares were recently trading up $8.05, or 54%, to $23.05 after its successful initial public offering Tuesday. Its shares priced at $15 in the IPO, above the estimated range of $11.50 to $13.50.

"Data Domain far exceeded expectations," said Sal Morreale, IPO tracker at Cantor Fitzgerald. Indications looked strong on Friday with investor orders for shares running at four times the 7.4 million shares planned for the IPO, said Morreale. By Wednesday, demand had reached 12 times the planned offering.

Six-year-old Data Domain develops hardware to make electronic data more efficient by avoiding duplication. The disk-based devices help companies and government agencies back up and store data as part of disaster-recovery plans.

Disk-based storage has become more affordable as disk prices have fallen over the past five years and have become more competitive with tape-based storage. Companies typically prefer to use electronic storage on disks, because they are much easier and quicker to search than are tapes.

Most of Data Domain's customers are small and medium-size businesses for which disk-based data backup has become more affordable. But the company is making headway with larger clients that need to back up information received from multiple remote locations and store it in large data centers.

One of the company's largest clients is the U.S. Army, which uses Data Domain's hardware for backing up data on a communications network serving 1.8 million users that are scattered across the globe.

Data Domain's revenue in 2006 rose nearly six times from the year before, reaching $46.4 million. Roughly one-third of revenue came from international customers. As sales have surged, the cost of revenue tumbled as a percentage of sales, helping the company's gross margins. But the company is still operating at a loss as sales and marketing costs rise.

"Data de-duplication," the term used to describe Data Domain's technology, is moving toward the mainstream of storage technology. Venture capital firms have invested about $230 million in de-duplication firms, and there has been $288 million in mergers and acquisitions in the industry, according to tech researcher The 451 Group.

"The rapid growth of Data Domain proves that there's a large and growing appetite for this technology out there," said Simon Robinson, 451 Group's director of research for storage products.

In November, EMC ( EMC) acquired Avamar Technologies, which makes a de-duplication appliances for backing up data from remote office sites.

Network Appliance ( NTAP) in mid-May launched a line of similar products. But so far, only Data Domain's technology is suited for backing up information from data centers.

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