SNW - EMC to buy Avamar for $165M

EMC announced at Storage Networking World this week that it is acquiring data backup and deduplication software vendor Avamar Technologies and is looking to help customers cut their use of tape backup.

EMC will acquire the privately held company for US$165 million in cash. The deal is expected to close within 30 days and all 100 Avamar employees are expected to remain. Avamar will be integrated into EMC's Storage Product Operations group along with EMC's NetWorker backup and recovery software.

Data deduplication is a way to reduce the amount of backup data by eliminating copies and then only backing up the remaining data once -- no matter how many times it's reproduced. The technology can reduce the amount of data being stored by 99 percent and make backing up to disk cheaper than backing up to tape, said Mark Lewis, EMC's executive vice president and chief development officer.

Avamar's Axiom disk backup and recovery product will continue to be sold as a stand-alone product, as will EMC's NetWorker. Avamar's deduplication technology could be integrated over time into EMC products such as the recently announced InfoScape, Lewis said.

Currently, the data deduplication market consists of about a half-dozen smaller vendors, including Avamar, Data Domain, Diligent Technologies and Exagrid Systems. Other vendors, including Advanced Digital Information, Falconstor Software and Sepaton, have announced plans to ship such products.

However, data deduplication has shown signs of being the next new technology to be subsumed by large storage vendors. The smaller companies have been signing partnership agreements with larger firms, which typically presages a round of agreements and acquisitions as the smaller vendors pair off with the larger ones.

Avamar had already made agreements with EMC and announced in late July that it was signing similar agreements with Hitachi Data Systems and Sun Microsystems. Diligent has a reseller agreement with Hitachi.

EMC CEO Joe Tucci said as recently as last month that EMC would pause its buying spree of the past three years to better consolidate business processes around the more than 21 acquisitions it had already made. That consolidation would include the layoff of up to 1,250 employees. However, he also said the company might make small "tuck-in" acquisitions geared toward a specific technology.