June 09, 2009, 9:03 PM — EMC chief executive Joe Tucci is making his case directly to the employees of Data Domain, the de-duplication and backup company that is subject to a bidding war between rivals EMC and NetApp.
A week after bidding $1.8 billion to purchase Data Domain, Tucci on Tuesday published an open letter to Data Domain employees describing the potential benefits of a merger.
NetApp has offered $1.9 billion to purchase the company, and Data Domain's shareholders are awaiting recommendation from the company's board on whether to accept one of the offers.
In the open letter to Data Domain employees, published in the San Jose Mercury News, Tucci notes EMC has made an all-cash offer to acquire Data Domain's outstanding stock, while NetApp's offer is part-stock and part-cash. For this reason and several others, Tucci says "we believe that bringing Data Domain into the EMC family would be the best way for you to continue building your careers and accelerating the success you've already achieved in the marketplace."
Tucci's letter further argues that because EMC has acquired 11 companies in the Silicon Valley over the past six years the storage vendor has become proficient in "preserving the various cultures" that made the acquired companies successful to begin with.
"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," Tucci writes.
Tucci tells Data Domain employees that their company would be operated as a product division within EMC, and that EMC will invest in Data Domain and grow the business. Tucci boasts of the "largest storage-focused R&D budget in all of IT," along with "ample cash and a very strong balance sheet to fund an exciting future."
"Our collection of considerable strengths -- along with our proven experience in successfully acquiring companies and empowering them to greater heights -- should provide assurance that EMC can grow and develop Data Domain more rapidly and effectively than NetApp can," Tucci writes.
The bidding war kicked off on May 20, when NetApp announced a $1.5 billion definitive agreement to purchase Data Domain, saying one of the goals of the acquisition was to provide backup for systems made by competitors such as EMC and HP.
EMC tried to steal NetApp's thunder on June 1 with a $1.8 billion offer, but NetApp upped its bid again later that week to $1.9 billion.
Data Domain's board told stockholders last week that it would make a recommendation on or before June 16.
NetApp claims that it can grow the Data Domain business faster than EMC, specifically stating that the "complementary nature of the Data Domain and NetApp product lines will result in higher aggregate growth compared to the redundancies that would result with the EMC product line."