May 20th

NetApp's (NASDAQ: NTAP) offer to acquire data deduplication specialist Data Domain
(NASDAQ: DDUP)

NetApp will pay $25 a share, or $1.5 billion, for Data Domain, which closed today at $17.91.

June 1st
EMC Outbids NetApp for Data Domain
EMC (NYSE: EMC) late today offered $30 a share for the

June 3rd
NetApp Matches EMC's Offer for Data Domain

June 3rd
Data Domain (NASDAQ: DDUP) said late today it will accept NetApp's (NASDAQ: NTAP)
sweetened takeover offer, but EMC (NYSE: EMC) insists that its offer is superior.

June 15th
Data Domain (NASDAQ: DDUP) has once again said it favors NetApp (NASDAQ: NTAP) over rival EMC
(NYSE: EMC)

July 2nd
Data Domain-NetApp Merger Lawsuit Moves Ahead legal issues

July 6th
EMC Raises Bid for Data Domain as FTC Clears Merger

EMC's $2.1 billion all-cash bid for the data

July 8th
NetApp announced late today that it "will not revise its proposal to acquire Data Domain in the wake of
EMC's higher unsolicited offer, and that NetApp and Data Domain have terminated their merger
agreement

What's Next for EMC, NetApp and Quantum?

How Experience Helped EMC Win Data Domain

20th of May

In something of a shocker for the data storage industry, NetApp (NASDAQ: NTAP) announced
late today that it will acquire data domain

Deduplication has been one of the hottest data storage technologies in the last year or so, helping
storage users save money by eliminating duplicate data. As the company that pioneered the technology,
Data Domain has managed to grow at a 30 percent to 40 percent rate even in the sharp slowdown that
has pummeled IT spending this year.

The move immediately vaults NetApp to the forefront of vendors offering the technology, and makes
Data Domain part of a broader storage product lineup. It also gives the company a strong disk-based
backup product to complement its NearStore VTL line.

NetApp will pay $25 a share, or $1.5 billion, for Data Domain, which closed today at $17.91.

In a statement, NetApp CEO Dan Warmenhoven said, "Data Domain is an innovative high-growth
company with a complementary product line ideally suited for multi-vendor environments where
customers want to minimize their use of tape for backup. NetApp has the distribution channels and
international reach to offer Data Domain products to more customers, accelerating growth and market
adoption.

"Our objective will be to amplify Data Domain's success, grow Data Domain's revenues as quickly as
today's economy will allow, and create systems and incentives within NetApp to nurture Data Domain to
its fullest potential," added Warmenhoven. "We will focus on new customer acquisition and maximum
market share expansion. Their existing customers should see the benefits of NetApp's broader scale and
support capabilities."

Data Domain CEO Frank Slootman said of the deal, "Notwithstanding the rapid record sales growth Data
Domain has experienced over the past five years, with NetApp's distribution channel and customer base,
we have an opportunity to accelerate even further."

On a conference call tonight, Warmenhoven said close ties between the two companies and Data
Domain's desire for a bigger sales reach helped seal the deal.

NetApp said it will operate Data Domain as a product line within NetApp's product operations
organization. The Data Domain sales organization will be integrated with NetApp sales "to maximize
momentum and access new accounts."

NetApp said Data Domain adds a "complementary offering ... expanding NetApp's reach in the market
for heterogeneous disk-based backup."

NetApp said its backup and VTL product line offers disk-based solutions to augment tape backup
infrastructures. Data Domain's portfolio "will extend NetApp's ability to compete in the increasing
number of installations wanting to minimize their reliance on tape. The Data Domain acquisition
increases NetApp's ability to capitalize on the growth of disk-based backup adoption, a trend
accelerated by the economics of deduplication."

Enterprise Strategy Group analyst Brian Babineau called the merger "A great move for both companies.
NetApp needed to renergize growth, and Data Domain has market-leading technology. They got a great
premium, and they don't have to worry about constantly battling EMC and NetApp for disk-based
backup opportunities."

Stifel Nicolaus analyst Aaron Rakers called the acquisition "a bold/aggressive move by NetApp to get a
position in appliance-based deduplication — a market in which we have consistently highlighted
NetApp's lack of traction with its VTL solutions."
Rakers said the deal could reduce some of the takeover speculation that has surrounded NetApp. He
and R.W. Baird analyst Jayson Noland said other storage vendors could make a bid for Data Domain, but
that it would be difficult to top NetApp's offer. Rakers rates NetApp a hold, while Noland rates the
company "outperform."

Enterprise Strategy Group analyst Lauren Whitehouse said the deal "came as a bit of a surprise given the
overlap in technology. NetApp did some tap dancing on a call with media and analysts rationalizing the
acquisition." She questioned NetApp's emphasis on the $3 billion tape elimination market for Data
Domain's products, instead of the larger $16 billion disk-based backup market

NetApp also reported better than expected quarterly results, something the data storage industry hasn't
seen much of this year. HP (NYSE: HPQ), IBM (NYSE: IBM) and EMC (NYSE: EMC) all reported a drop of
about 20 percent in storage hardware sales, while EMC's overall sales were down 9 percent in the first
quarter.

NetApp's non-GAAP earnings of 31 cents a share, or $103 million, were 8 cents better than expected.
Sales were down 6.2 percent to $879.6 million — but that was $23 million better than the Thomson
Reuters consensus forecast.

NetApp said storage needs for VMware (NYSE: VMW) server virtualization environments are helping the
company's sales.

The company did not offer current quarter sales guidance because of "reduced visibility caused by the
recent changes in the macroeconomic environment."

June 1
EMC (NYSE: EMC) late today offered $30 a share for the dedupe pioneer, a 20 percent premium to
NetApp's offer made less than two weeks ago.

EMC's all-cash offer values Data Domain at $1.8 billion. EMC said its offer isn't subject to financing or
due diligence contingencies, and the company said it is "promptly commencing a tender offer for all
outstanding Data Domain common stock in order to expedite the timing of this transaction."
EMC CEO Joe Tucci said in a statement, "Strategically, this combination will further enhance our ability
to broaden EMC's best-in-class storage portfolio for the benefit of EMC and Data Domain customers and
this, in turn, will accelerate EMC's top-and bottom-line growth rates."

Tucci added, "The combination of EMC and Data Domain technologies will strengthen EMC's leadership
in the fast-growing and very important next-generation disk-based backup and archive market, and will
also result in a business larger than a billion dollars for EMC in 2010."

EMC said it made the offer to acquire Data Domain "for its fast-growing revenue base, its strong data
protection-focused management team and sales force and its highly complementary storage software
technology that will help to accelerate both companies' ability to deliver industry-leading next-
generation disk-based backup and archiving solutions for customers."

Some analysts on a conference call following the announcement wondered if EMC was simply trying to
keep Data Domain out of NetApp's hands, a charge Tucci denied.

On the call, Tucci cited the synergy between Data Domain's target-based dedupe approach and EMC's
source-based Avamar technology. He also cited the EMC Disk Library (EDL) 4000, which uses Quantum's
dedupe technology, as part of EMC's overall dedupe strategy, and said EMC will continue its relationship
with Quantum.

Enterprise Strategy Group analyst Lauren Whitehouse is among the analysts puzzled by EMC's offer.

"It does appear as if EMC is just playing the spoiler here," Whitehouse told Enterprise Storage Forum.
"I'm not sure what their motivation is otherwise. Bidding on Data Domain is not a great statement about
its investments in deduplication technology from Avamar or Quantum. The Avamar technology has been
successfully integrated and is being embraced in the market. Since it is source-based deduplication, Data
Domain could possibly complement Avamar. Regarding Quantum, I don't know that there is room for
both Data Domain and Quantum in the same portfolio. The bid by EMC doesn't bode well for Quantum."

Dedupe has been one of the hottest data storage technologies in the last year, as users have latched
onto the data reduction technology to save on storage costs in a tough economy.

Data Domain shares traded above $30 a share in after-hours trading tonight, suggesting that traders
think NetApp may make a counter-offer.
"This is going to be very interesting," said Enterprise Strategy Group analyst Brian Babineau. "NetApp
has showed its cards; it has to counter. How will it beat all cash is the big question. There will be a
winner and a loser in the battle."

June 3rd

NetApp this morning said it is raising its offer for data deduplication specialist Data Domain to $30 a
share in cash and stock, matching EMC's all-cash offer.

NetApp claims the stock portion of the deal gives Data Domain a tax advantage, and NetApp also claims
that an EMC-Data Domain deal would face regulatory scrutiny that a NetApp deal would not.

Analysts don't appear swayed by those arguments, but Avian Securities analyst Matthew Bryson says
NetApp may have the upper hand for now.

"We believe that NTAP's arguments for its proposed transaction being superior to EMC's all-cash offer
are somewhat shaky (especially the claim around antitrust issues as a potential sticking point)," Bryson
wrote in a research note this morning, "however, at the end of the day we believe equal total value
should be enough, particularly with NTAP controlling over 20 percent of DDUP's voting rights. As such,
the ball is back in EMC's court now. Any further bidding by EMC will be a negative for NTAP as they will
likely be forced to mach the higher price or lose what many think is a good growth opportunity."

R.W. Baird analyst Jayson Noland pegs NetApp's stake in Data Domain at 27 percent, and he said he
expects EMC to raise its all-cash offer.

Stifel Nicolaus analyst Aaron Rakers agrees that a higher offer from EMC is a possibility. "We ultimately
believe that EMC's cash position will allow them to make an increased offer above the current $30 per
share offer in order to acquire Data Domain," he wrote this morning.

One company with a lot at stake in the outcome is EMC dedupe partner Quantum (NYSE: QTM). Analysts
believe that an EMC-Data Domain combination would leave little room for Quantum. And if EMC fails in
its bid to acquire Data Domain, it would need to reassure customers that it remains confident in its
current dedupe product lineup.

If EMC wins, what happens to their Quantum relationship?" wondered Enterprise Strategy Group analyst
Brian Babineau. "What is NetApp's response? And if NetApp wins, does EMC just go back to Avamar and
its Quantum relationship for their VTL?"

Babineau said EMC could also win if NetApp is forced to overpay for Data Domain.

"EMC really is the winner," he said. "They win if they get Data Domain, and they win if NetApp is
bleeding at the end."

With Data Domain shares trading at around $32.50 today, investors seem to believe that EMC may make
one more bid for the company.

6th of June
this morning raised its takeover bid for Data Domain (NASDAQ: DDUP) after the FTC cleared the way for
the merger, leaving the next move up to rival NetApp (NASDAQ: NTAP).

EMC's $2.1 billion all-cash bid for the data deduplication specialist is about seven times Data Domain's
sales in the last four reported quarters, and about 10 percent greater than NetApp's cash-and-stock
offer.

8th July
NetApp announced late today that it "will not revise its proposal to acquire Data Domain in the
wake of EMC's higher unsolicited offer, and that NetApp and Data Domain have terminated their
merger agreement
Following NetApp's announcement, Data Domain said in a statement that it has "entered into a definitive
merger agreement with EMC" and canceled the Aug. 14 shareholder vote on the proposed merger with
NetApp.

EMC CEO Joe Tucci stated, "This is a compelling acquisition from both a strategic and financial
standpoint. We look forward to bringing Data Domain together with EMC to form a powerful force in next-
generation disk-based backup and archive. 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."

EMC's winning bid of $33.50 a share values Data Domain at a little more than $2 billion, or about seven
times the company's revenues in the last four reported quarters. Including Data Domain's cash on hand,
the deal comes to about $2.4 billion for the company, which analysts expect to grow at about a 30 percent
rate over the next few years. EMC's sales force could add to that growth rate.

CEO NetApp Dan Warmenhoven said in a statement that the company is "highly confident in our already
compelling strategic plan, market opportunities and competitive strengths.

NetApp applies a disciplined approach to acquisitions, one focused intently on creating long-term value
for our stockholders," he added. "We therefore cannot justify engaging in an increasingly expensive and
dilutive bidding war that would diminish the deal's strategic and financial benefits."

June 10

Some storage industry observers think that could be one of the issues behind Data Domain's
apparent preference for NetApp over East Coast rival EMC. Data Domain could shed some
more light on the issue when it issues a formal response to EMC's all-cash takeover offer some
time in the next week.

EMC published an open letter yesterday from CEO Joe Tucci that was intended to reassure Data Domain
employees while reiterating the company's claim that its offer is superior to NetApp's cash-and-stock
offer. The letter was also published in the San Jose Mercury News.
Tucci noted that EMC has acquired 11 companies in the last six years in the Silicon Valley area and has
about 6,000 employees in the region.

"We are very mindful of culture — respecting and preserving the various cultures that made the
companies we acquired successful in the first place," he wrote. "In nearly every instance, after joining
EMC, these businesses have grown faster, advanced the development of their technologies more rapidly,
reached more customers, and provided greater career opportunities for their people than they had been
able to do on their own."

Taneja Group founder and consulting analyst Arun Taneja said that "if all else were equal, I think Data
Domain employees will probably stick with a Silicon Valley company. I have lived and worked on both
coasts and I know how they feel. I happen to think it is not necessarily true, especially today when the
coastal cultures in the high-tech field are much closer than they were twenty years ago."

Another connection between Data Domain and NetApp — besides being separated by just a few miles in
Santa Clara and Sunnyvale — is that NetApp CEO Dan Warmenhoven and Data Domain CEO Frank
Slootman "both share a Dutch heritage and are known to be close," said Taneja. "Maybe none of these is
the factor, but once you combine them, you start to see why Data Domain employees might favor being
part of NetApp."

Taneja said EMC "is known to be a hard company to work for, but the fact is they have done a great job
of absorbing companies and their employees." NetApp, on the other hand, "is known as a fine place to
work, but their acquisition record is not that great."

Taneja cited Avamar, Kashya and WysDM as a few of EMC's successful acquisitions, and noted
that NetApp has struggled with the acquisitions of Spinnaker Networks, Alacritus and Topio.
"There are stories of internal political battles that have kept the Spinnaker technology to still not
be incorporated across the board," he said. "The Topio product was killed. The Alacritus product
has produced nothing of value that I can see."

http://www.enterprisestorageforum.com/industrynews/article.php/3828161/Data-Domain-NetApp-
Merger-Lawsuit-Moves-Ahead