Also on acquisition radar screens is CommVault Systems (CVLT). Both NetApp and Dell are rumored to be interested in this smallish company, with a market cap of around $860 million. CommVault boasts a compelling mix of back-up storage, data protection and de-duplication applications (or storage technology that saves space because it doesn't duplicate existing data). In fact, the de-duplication business is especially attractive to NetApp now that it has been outbid by EMC for Data Domain, which specializes in de-duplication. "Dell resells a lot of CommVault products today," says Male, suggesting why Dell might bid for the company. HP is also a possible suitor, he adds. CommVault could earn 64 cents a share in fiscal year 2010 (March). Shares traded around 21 last week.

The kinds of companies Sacconaghi can see Dell buying follow: Salesforce.com (CRM), Compellent Tech (CML) and CommVault (CVLT).

From Barron's 7-2-07:

Market Outperform - Price 16.58 on June 26
by JMP Securities
"Initiating coverage with Market Outperform and 12-month target of 20, or 21% upside from current level. CommVault is a leading provider of storage software solutions, including flagship product Galaxy Backup and Recovery. We believe CommVault is well-positioned in the storage-software market, given its unique technical architecture, comprehensive data-management platform, upcoming product cycle and solid distribution relationships. We are introducing our fiscal-year '08 non-GAAP earnings-per- share estimate of 57 cents, one cent above consensus. We are introducing our FY09 non-GAAP EPS estimate of 72 cents, 2 cents above consensus. Our price target places CommVault at a calendar 2008 price-earnings multiple of 30 times, a premium to its peer group, but only a slight premium to its estimated earnings-growth rate of 29% from calendar-year '07 to CY08."

low cost, bit of fluctuation, growing industry

attractive growth