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With analysts putting data growth in the range of 50 percent or more per year, storing duplicated data is just adding insult to injury.

According to one source, duplication rates run as high as 30 percent or more among companies that don’t have the appropriate policies and tools in place. This might help explain why data deduplication is considered one of the top technologies of the next decade, and why IT solution providers must pay more attention to this still-small-but-growing market segment.

IDC reports that demand for storage efficiency is driving deduplication adoption, and there are growing opportunities for the channel. More than 60 percent of respondents are either in the process of deduplicating or have plans to deduplicate their primary, backup, or archive data in the coming year, says Laura DuBois, program director, Storage Software, IDC.

The numbers are even better when it comes to buying intentions, with 76 percent intending to spend over the next 12 months.

As for the channel, DuBois believes the biggest opportunity is changing the existing market dynamics where 76 percent of customers buy directly from the vendor.

"I think there is an opportunity to change that," she tells Channel Insider.

The benefits of reducing or eliminating duplicate data go far beyond freeing up storage media and the associated purchase and maintenance costs. Shrinking the amount of data that needs to be stored can reduce backup windows, cut communication costs and improve such critical areas as replication, remote backups and disaster recovery.

Business continuity is the main driver behind this market, analyst David Hill, principal at Mesabi Group, tells Channel Insider. If there is ever a problem, you have to be able to restore the data, he says. Ever since Sarbanes-Oxley and the threat of legal repercussions, risk avoidance has been critical, and it’s not just for big companies, he says.

"Going to jail may be a concern for large organizations, but for smaller businesses, if you lose your data, you’re out of business,” Hill says

EMC and NetApp dominate hardware-based deduplication, while EMC, Symantec and IBM were the top three software-based dedupe vendors. The biggest opportunity is for both physical and virtual servers, and DuBois says the vendors that can do both should grab the majority of the business.

Last year EMC out-dueled NetApp to buy Data Domain, shelling out $2.1 billion for a company that was generating less than $300 million in annual sales. However, Deloitte LLP ranked Data Domain as the seventh fastest growing technology company during 2004-08, with revenue growing more than 35,000 percent.

While EMC may own the lion’s share of this market, with revenues growing at 50 percent per year, there are a lot of companies out there with data dedupe and backup-and-restore capabilities, says Hill.

CA, EMC, Hewlett-Packard, IBM and Symantec all have well-recognized, well-respected and well-accepted products in the backup/recovery software  space, and there are a host of smaller vendors like Acronis, Atempo, BakBone and Zmanda. Two companies that stand out are CommVault and Arkeia Software, he said.