“NetApp and EMC Battle over Data Domain is Catalyst to Dedupe 2.0”; Interview with Permabit CEO Tom Cook

The pending acquisition of Data Domain by either EMC or NetApp is going to have a ripple effect across the storage industry with some providers more affected by it than others. Numerous backup providers have gone on the record and told me that they are confident they can compete against Data Domain regardless of who acquires them. However, Permabit has a bigger view. It sees Data Domain’s acquisition as the catalyst to the spread of deduplication beyond just disk-to-disk (D2D) backup into primary storage. In this first part of a two-part interview with Permabit’s CEO , I discuss with Tom what impact Data Domain’s acquisition will have on Permabit and how it has led to the emergence of “Dedupe 2.0”.
Jerome: Data Domain is likely going to be acquired by someone (EMC, NetApp or someone yet to emerge) in the next 60 – 180 days. Of these potential acquirers, where would you like to see Data Domain end up and why?
Tom: I am ambivalent about where Data Domain ends up. I congratulate the Data Domain team because they performed exceptionally well.  They executed well, they produced a box that worked and they caught a really important market trend. In so doing, they helped to create a market place and did a great job doing so.
However, Permabit defines Data Domain’s technology as “Dedupe 1.0” – a point solution focused on D2D backup. Data Domain did a tremendous job executing and they won “Dedupe 1.0”. There are a few companies around that compete in Data Domain’s market place but we think they are battling for a very distant second or third place. Overall we think it has been a pretty small market place with Data Domain having the lion’s share of the business which is a relatively small piece of what could be the overall deduplication pie.
So as Permabit looks at it, whether EMC or NetApp ends up with Data Domain, both will do a great job and have a leading product in the backup category. But we think they have acquired a point solution that addresses a very specific problem – back-up!
Meanwhile at Permabit, we are looking beyond Data Domain’s acquisition to what this means going forward, specifically the emergence of “Dedupe 2.0”. We think we are at the beginning of that era right now. So whoever does not acquire Data Domain, and the other parties in the industry, will now focus on what deduplication can really be.
We define “Dedupe 2.0” as ubiquity of deduplication throughout the storage environment. Every SAN, every direct attached storage device and every NAS device will have optimization built in. Deduplication technology will be a part of that optimization process.
Data Domain’s acquisition accelerates movement of the market in that area which excites us. We think that the application of deduplication will become ubiquitous from primary storage to value storage to backup and then on to cloud storage. This acquisition is the catalyzing event that will really turn “Dedupe 2.0” loose in the market place and ironically whoever acquires Data Domain may lag behind in the  “Dedupe 2.0” market .
Jerome: You made an interesting comment there, Tom. You mentioned you saw this acquisition of Data Domain as serving as a catalyst in the market. How does Data Domain’s acquisition change the market in which Permabit competes?
Tom: I certainly think its acquisition catalyzes the adoption of deduplication technology as it really shines the spotlight on efficiency. What we have seen over the last year, and I think in part  this has been driven by the economy, is that people have gotten really focused on their storage cost structure…they are looking for new ways to drive down costs in storage because there are many ways to skin a cat to lower storage costs.
What we have seen are some emerging vendors, Data Domain being one of them, focused on efficiency in a specific area. At Permabit we focus on greater efficiency in the value storage area and the cloud storage offering that we have just released too. We have seen other vendors like Compellent and 3PAR that bring efficiency to the market in other ways too. We are going to see increased focus on efficiency and deduplication technology will become more ubiquitous because of that.
Jerome: So how do you see deduplication evolving?
Tom: In the next 18 month time horizon, if a storage manager goes to the CIO of his/her organization to get sign-off on a P.O., they are going face a question that goes like this, “What is the deduplication rate in this storage?”
If the storage manager looks at them and says, “I don’t know.” I think they are going to receive instructions to go back and find out before sign off. If the answer to the question is, “There is no deduplication included in this solution”, I believe the CIO is going to kick the P.O. back to the storage manager and tell them to go find one that does.
And if you are a vendor that does not ship dedupe with your product you will face immediate pricing pressure.
We are going to see deduplication technology move very, very quickly into primary, value storage and cloud storage tiers. Just as it penetrated backup. In the next permutation of deduplication, we will see add-on deduplication technology and then embedded deduplication technology across the board in storage. Think about it, if your NetApp NearStore or EMC Celerra gave you 20X dedupe on your backup, why would you buy Data Domain?
In part two of this two-part interview series, I discuss with Tom the increased focus that enterprises are putting on deploying cost-efficient storage solutions and how Permabit is evolving to help these organizations deliver on that objective.