EMC (NYSE:EMC) started a gunfight in the storage world today by offering an astonishing $1.8 billion for data deduplication sweetheart, Data Domain (NASDAQ:DDUP). This $30 per share offer one-ups rival NetApp (NASDAQ:NTAP) by $5 per share, which looked to have sealed the deal with a solid $1.5 billion offer on May 20. EMC’s offer is all-cash, while NetApp had mixed cash and stock.

Why all the interest? Data Domain has emerged as the leader in data deduplication, a key technology for controlling the rapid growth of duplicate data in enterprise IT. Although both EMC and NetApp offer deduplication products, Data Domain’s products were widely lauded and adopted by end users, especially in smaller organizations.

Although many questions were raised about the fit for Data Domain within NetApp’s product lineup, the fit in EMC makes more sense. Their Quantum-based VTLs are expensive and enterprise-focused, while a new Data Domain-powered line might have broader appeal. Although EMC appears to have cemented their Quantum relationship with a $100 million investment to keep the backup products vendor afloat, the fact that they did not buy the company outright might indicate that they had second thoughts. EMC’s Chuck Hollis claims that Data Domain makes sense at many levels throughout EMC’s product portfolio.

Others have suggested that the offer was purely defensive, designed to keep Data Domain out of NetApp’s hands or to drive up the eventual price the West coast team would eventually have to pay. This would be a very expensive gamble, however, since NetApp already has homegrown deduplication technology and could walk away entirely.