Shopping for tech companies in the data storage aisle? Bring lots of cash.

Recent deals like

EMC's

(EMC)

takeover bid for

Data Domain

( DDUP) show the power of cash and the willingness to pay premiums of 40% or more.

Value is never easy to determine in a turbulent market, but it certainly helps to have competing offers driving up the price. And to the cash-rich go the spoils.

EMC's $1.8 billion all-cash bid for Data Domain surpassed

NetApp's

(NTAP) - Get Report

prior offer

of $1.5 billion in cash and stock by 20%. The bid also represents a 67% premium over Data Domain's closing stock price May 20, just prior to the NetApp takeover offer.

Sound rich? Recall that

Oracle's

(ORCL) - Get Report

deal

for

Sun Microsystems

( JAVA) commanded an all-cash, $9.50 a share that represented a 42% premium to Sun's stock price after

IBM's

(IBM) - Get Report

deal discussions with Sun collapsed.

With sales slumping, some big tech shops are willing to part with some cash to lock up more of the market.

"Consolidation is inevitable because organic growth is going to be hard to come by," says Collins Stewart analyst Ashok Kumar.

Given all the cash on the books and so little debt among tech outfits, a lot of companies aren't feeling the pinch of a tight credit market and are therefore more able to spend on acquisitions.

For network storage giant EMC, which competes directly with data storage rival NetApps, the move for Data Domain not only plugs a hole in its product offering, it prevents EMC from falling behind in storage technology.

Data Domain makes storage systems that eliminate duplications in backup data. This fits well with the capacity conservation movement in storage technology and adds another feature to the equipment EMC already sells to storage customers.

The takeaway from all this, is that EMC, like all the big players, "want to increase their share of their customer's wallet," says Kumar.

EMC had $6.3 billion in cash as of the end of March, so the $1.8 billion cash tender offer for Data Domain won't necessarily break the budget. NetApp, on the other hand, has a mere $1.7 billion in cash on its books, according to a March filing.

Shares of Data Domain rival

CommVault

(CVLT) - Get Report

surged 12% Tuesday as investors figured NetApp would avoid a bidding war with EMC and buy the next best thing.

With a $540 million market cap, CommVault could fit in with the rich-cash premium fad that taking over the takeover market.