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Home > Storage Technology News > Data Domain, Quantum increase deduplication sales |
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Data Domain reported revenue of $85 million for the quarter Thursday night, while financial analysts expected approximately $83.4 million. Data Domain claimed 383 new customers last quarter and 1,367 in 2008. Revenue for the quarter increased 90% over last year, while revenue of $274.1 million for the year was up 122% over 2007.
But the economy and competition may be catching up. Data Domain's forecast for this quarter of $79 million to $84 million was lower than expected, despite claims from its executives that it's not losing ground to any competitors. Customers are getting more deduplication choices, seemingly by the day. This week alone, CommVault introduced its Simpana 8 with block-based deduplication for backup, while Quantum Corp. upgraded the dedupe software for its DXi7500 disk libraries. During its earnings report Tuesday, EMC Corp. said it recorded $90 million in revenue for deduplication last quarter – including its Avamar host-based deduplication and DL disk libraries that license Quantum's dedupe software. Quantum also reported earnings Thursday night, claiming a 100% increase in its disk and software revenue – primarily the DXi7500 – despite an overall drop in revenue from declining tape sales. Dedupe moving into the enterprise Data Domain CEO Frank Slootman says his company will continue to bring out larger dedupe devices to go after big enterprise accounts. The DD690 – Data Domain's biggest system – accounted for most of its revenue last quarter, increasing from $25 million in the previous quarter to $37 million. "You can expect bigger and faster systems coming out of Data Domain," says Slootman. "Our business has shifted in makeup from the midrange to the enterprise." Data Domain will also increase its integration with Symantec Corp.'s OpenStorage (OST) API to improve management of its devices through Symantec's Veritas NetBackup software. Data Domain began supporting OST last March, and OST support was part of Quantum's announcement this week. "We invested early in OST, and that's making a big difference in high-end enterprises because it has tremendous throughput advantages and replication can be controlled through NetBackup instead of as a separate process," says Slootman. "We view this going forward as an important piece of the product – not a tape or file protocol, but a new API set." Quantum leaps from tape to dedupe Quantum continued its recent trend of increasing its disk sales while losing money on tape. Quantum reported $31 million in disk and software revenue, as CEO Rick Belluzzo said his company received a boost from its OEM deal with EMC and sales of a new DXi7500 Express midrange dedupe product. Quantum claims its dedupe technology is used to protect more than 400 PB of data, counting EMC sales. With Dell Inc. prepared to begin selling Quantum dedupe software this year, Belluzzo predicts Quantum dedupe deployments will surpass Data Domain's this year. "We feel we're in the early phase of this move to deduplication, and it's been our strategy to grow that business," says Belluzzo. He says Quantum's strategy is to concentrate on dedupe disk backup and midrange to low-enterprise tape automation products, while cutting development of low-end tape automation products. "That's a shift we have to make," says Belluzzo. "We're becoming more of a systems company and less of a device and tape company." Overall, Quantum's revenue of $204 million last quarter declined 19% from the previous year. The company lost $340 million, including a $350 million charge for goodwill impairment due largely to the decline of its stock price to below 40 cents per share. "Our revenue was down for two reasons," says Belluzzo. "We let parts of the business go down, and it was a tough economic quarter." Last-minute budget cuts hurt sales Despite his company's strong revenue, Slootman says Data Domain did feel the sting of the economic climate. He says several deals were cancelled at the last minute when potential customers discovered their budgets had been cut. "People are getting stopped at the one yard line by their own management," he says.
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