EMC’s Next Sales Job: Data Domain Employees

With the battle for Data Domain (NASDAQ: DDUP) won, EMC (NYSE: EMC) has turned its attention to winning the hearts and minds of Data Domain employees (see What’s Next for EMC, NetApp and Quantum?).

After a six-week battle in which it became clear that Data Domain favored EMC rival NetApp (NASDAQ: NTAP), EMC CEO Joe Tucci and Data Domain CEO Frank Slootman have begun the process of reassuring Data Domain employees about their new employer.

Tucci and Slootman sent a letter to Data Domain employees on Friday, and they plan to meet with them this afternoon at Data Domain headquarters in Santa Clara, Calif., “for an extended dialog with you about what our future together will hold.”

“While we recognize that the past few weeks have been an unsettling and distracting time, we hope you’ll view EMC’s persistence as a sign of how much EMC values Data Domain, how strategic EMC views your technology, and how committed both of us are to bringing the industry’s most innovative and highest quality products to market and extending and accelerating your success,” the letter said.

The letter sought to reassure Data Domain employees that EMC values the company’s culture and employees, similar to an open letter to Data Domain employees that Tucci penned during the takeover battle.

EMC isn’t saying much about the integration details of the deal, as the merger isn’t expected to be complete for a couple of weeks.

But analyst Kaushik Roy of Wedbush Morgan said EMC’s strong acquisition track record also extends to its ability to retain key employees. He cited Diane Greene of VMware (NYSE: VMW) and Dave DeWalt of Documentum as two executives who stuck around in key positions for some time after their companies were acquired, although Greene was forced out last year. Roy thinks Slootman could stay on — and even become a possible successor to Tucci.

“EMC is pretty good at retaining key employees in acquisitions,” said Roy. “Not just the CEOs, but the senior management team usually sticks around at EMC.”

In the case of Data Domain, Roy said he thinks employees “didn’t really care much if they became part of EMC or NetApp. They also don’t care much if EMC is headquartered in the East Coast. I believe Data Domain employees are excited to be part of the bigger/larger footprint of EMC. Of course, there will always be some people who will leave voluntarily or will be asked to leave because of redundancies in roles, but in general EMC is pretty good at integrating acquired companies.”

Roy noted another reason for Data Domain employees to be happy about the deal: Their stock options were ultimately worth about 12 percent more, thanks to EMC’s higher bid.

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