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Quantum reveals new OEM dedupe deal, keeps partner secret *UPDATED*

Quantum CEO Rick Belluzzo says his company has a new “significant” OEM partner for its data deduplication backup software.

Belluzzo refused to name the new partner, saying the partner will make that announcement when it is ready. His revelation came on the same day Fujitsu made a deduplication announcement but did not refer to any partners.

Quantum sells its own DXi family of data deduplication virtual tape libraries (VTLs) and NAS appliances, and also sold dedupe through an OEM deal with EMC until EMC acquired Quantum rival Data Domain for $2.1 billion last July. Since then, Belluzzo has been talking to new prospective partners.

During Quantum’s earnings conference call with analysts Thursday night, Belluzzo said the deal was in the “final stages of completion.” In a one-on-one interview after the call, he said it was a done deal although wouldn’t give any more information except that the new OEM partner will use Quantum’s deduplication software on the partner’s hardware, just as EMC did with its Disk Library platform.

“I would just say we have an agreement, and we’re proceeding around implementation,” Belluzzo said. “It’s all happening pretty fast. The EMC-Data Domain acquisition really lit a fire under the industry in terms of people determining what their [deduplication] product roadmap should look like. We’ve been in a lot of conversations. For something to close as quickly as this, it really shows how high of a priority deduplication is becoming.”

NetApp and Hitachi Data Systems are the most obvious candidates among major storage vendors looking for a backup dedupe partner. NetApp was outbid by EMC for Data Domain, and HDS was close to sealing an OEM deal with Data Domain before Data Domain was acquired. Dell also lacks its own deduplication product, but it partners with CommVault and Symantec for dedupe software. Industry insiders also expect Dell to eventually add Data Domain devices to the list of EMC products that it resells.

Then again, maybe Quantum’s partner already launched its dedupe feature. Fujitsu says it has added deduplication to its Eternus CS disk appliances, including support for Symanted OST. Quantum has worked closely with Symantec on OST, and Fujitsu is already a Quantum tape partner. In fact, Belluzzo said on the call that Quantum expanded its tape reseller relationship with Fujitsu. When asked if Quantum’s new dedupe partner was a Tier 1 vendor, he said, “it’s a significant company but I don’t know how you’d characterize its tier.”

Quantum reported $182 million in revenue last quarter, an 11% year-over-year decline — mainly because of lost revenue from EMC and tape OEM deals. Disk and software – a category made up largely of DXi sales – came to $25 million, down from $31 million a year ago. Belluzzo says nearly all the EMC revenue was lost, but branded DXi sales increased.

Belluzzo also said Quantum’s legacy tape business was stronger than it has been in a long time, leading to three consecutive profitable quarters. “We have positioned our tape business as a healthy place,” he said, claiming Quantum is the leader in automated libraries for open systems.

Belluzzo said he’s not worried about that business now that Oracle has closed its Sun acquisition, and revealed plans to continue Sun’s StorageTek tape business. “There’s been a lot of change in the tape market in recent years,” he said, “including the continuing saga of StorageTek being acquired by Sun, rumored to be sold, and now Oracle says they’re going to keep it and go direct and not through the channel. We’re positioned as well as we’ve been in years.”

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