EMC's Tucci Appeals to Data Domain Employees

EMC is continuing its fight to win the bidding war for Data Domain. Joe Tucci, EMC chairman, president and CEO, posted an open letter to Data Domain employees today, telling them they could have "a great and exciting future" if their company became part of EMC.

This is the latest development in an ongoing battle between EMC and NetApp for control of Data Domain and its popular data deduplication technology. After competing bids of $30 per share from each company, Data Domain's board accepted the NetApp bid, but said it would evaluate the offer from EMC and urged shareholders to "defer making a determination whether to accept or reject EMC's offer" until the board made a recommendation, which it said it would do by June 16.

EMC's offer is all cash, which it says is better than NetApp's offer of cash and stock. NetApp says its combo offer has more upside potential than the all-cash offer from EMC. Filings with the Securities and Exchange Commission indicate that NetApp had made several bids for Data Domain over several months, and that Data Domain's board accepted an offer without seeking bids from rivals like EMC.

In a letter published on EMC's Web site and in the San Jose Mercury News, Tucci wrote that "We at EMC have the highest regard for the people of Data Domain. You have built a terrific company. ... In many ways, you remind us of EMC."

He said that making Data Domain a part of EMC "would be the best way for you to continue building your careers and accelerating the success you've already achieved in the marketplace."

That is because EMC is a leader in storage and information management and has a well-established track record of acquiring companies and helping them become leaders in their markets, he wrote. "For example, over the past six years in the Silicon Valley area alone, we have acquired 11 companies, and today we have 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. 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," the letter said.

Tucci goes on to describe EMC as a place with many cultures, but common characteristics such as "respect, commitment to customers, and passion for innovation and winning."

He said EMC acquires and invests in growth companies and that many of the employees in those companies "have gone on to leadership positions in EMC, and we would expect the same potential from the talented people at Data Domain."

He repeated the company's public statement that it plans to keep Data Domain intact and operate it as a product division within EMC. "Your target-based deduplication technologies are important to the future of enterprise IT. We plan to invest in Data Domain and grow the business and the innovation even more aggressively because of our broader global reach and size," he wrote.

Tucci then ticked off other reasons why Data Domain employees should view EMC as a better parent: The largest storage-focused research and development budget in the IT industry, a portfolio of relatively new products, a global reach with opportunities for international experience, and a top company that provides high-quality training and development.

It isn't clear whether these arguments will convince Data Domain employees that "EMC can grow and develop Data Domain more rapidly and effectively than NetApp can," as Tucci wrote. And shareholders ultimately will decide who wins the battle for the company. But in many cases, analysts have pointed out, the success of mergers and acquisitions in the high-tech market end up being determined by how many employees in key areas likes sales, research, development, and management stay with the new owners.

Tucci acknowledges that when he wrote: "At the end of the day, companies are really about people -- committed, talented, passionate people who want to be challenged, who want to invent and create, do something meaningful and lasting, realize their full potential, make a positive impact on their communities and the world, and have fun doing it. That's exactly what EMC is about. ... And we stand ready to welcome the talented people of Data Domain to EMC with open arms."

InformationWeek has published an in-depth report on cloud storage. Download the report here (registration required).