EMC's Tucci Takes His Case to Data Domain EmployeesBy Carolyn April | Print
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In an open letter, EMC's chief executive takes the hard-sell approach to convince employees that his company is better-suited to buy the deduplication vendor than rival NetApp.
In his continued quest to acquire Data Domain, EMC Chairman and CEO Joe Tucci went hard-sell this week to convince Data Domain employees – the vast majority of whom are also shareholders – that they would benefit in far greater ways if purchased by his storage juggernaut versus rival NetApp.
In an open letter to Data Domain employees, Tucci pitched EMC’s market-leading status, its proven-track record in acquiring and successfully integrating other growth companies, a tolerant and flexible corporate culture and financial health. While not directly derisive of NetApp, whose $1.9 billion half-cash, half-stock bid for deduplication specialist Data Domain has been accepted, Tucci nonetheless made it clear he believes the NetApp deal to be inferior on many levels.
" EMC doesn't acquire to consolidate," his letter reads. "We acquire growth companies with great people and innovative technologies, and we invest in accelerating their success while their cultures continue to grow and develop. Many of the people in these companies have gone on to leadership positions in EMC, and we would expect the same potential from the talented people at Data Domain."
While Data Domain’s board of directors has accepted NetApp’s counterbid, EMC continues to try to disrupt the deal in a hostile takeover, maintaining that its all-cash $1.8 billion bid is a better deal for shareholders. Tucci’s not backing down.
"Looked at purely from a financial perspective, EMC's $30 per share all-cash tender offer to acquire all of the outstanding stock of Data Domain remains superior to NetApp's part-stock, part-cash offer," he writes.
But while Tucci clearly touted what he believes to be the pure financial benefits of an EMC-Data Domain deal, his letter emphasized the career and growth opportunities to be found working for EMC, the emphasis on innovation and global presence.
"Not only are we deeply committed to our people and their development, we also have by far the largest storage-focused R&D budget in all of IT, which ensures a product-development pace that enables us to derive the vast majority of our revenues from products that are less than 18 months old," he said.
From an acquisition standpoint, Tucci points to expertise at integrating companies into the fold, and while he doesn’t cite past EMC purchases by name they include some blockbusters such as VMware, Documentum, RSA Security, Iomega and Data General.
NetApp, for its part, does not share the same positive acquisition history, according to a widely held view in the industry. The company is often criticized for poorly integrating the entities they acquire. In the last several years, the company has purchased the likes of Decru, Onaro and Topio, but after the initial fanfare there has been very little heard about what became of these product lines. Spinnaker Networks is probably the most successful NetApp acquisition.