July 9 (Bloomberg) -- NetApp Inc., the maker of storage computers for companies such as Oracle Corp., may attract its own suitors after losing a bidding war for Data Domain Inc., analysts said.

Data Domain agreed to a $2.1 billion acquisition offer from EMC Corp. yesterday after NetApp didn’t counter the bid. As the industry consolidates, NetApp is now more vulnerable to a takeover, said Ashok Kumar, an analyst with Collins Stewart LLC.

“What you are seeing in the storage market is a thinning of the herd,” Kumar said in an interview from San Francisco. “In this market, either you’re a consolidator or you are consolidated -- and if you don’t fall in either category you are marginalized. NetApp is in danger of being marginalized.”

EMC’s purchase of Data Domain steps up competition with Hewlett-Packard Co., which may try to fire back by buying NetApp, Kumar said. He has a neutral rating on NetApp’s shares and doesn’t own them. There are no current bids for the company, NetApp President Tom Georgens said yesterday in an interview.

“This is America -- everything has a price,” he said. “On the other hand, our clear preference is to stay independent.”

NetApp rose 62 cents, or 3.4 percent, to $19.01 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have gained 36 percent this year. Hopkinton, Massachusetts-based EMC climbed 24 cents to $12.76 on the New York Stock Exchange.

EMC, the largest maker of storage computers, offered $33.50 a share in cash for Santa Clara, California-based Data Domain. EMC and NetApp were vying for the company because they wanted Data Domain’s technology, which helps businesses cut storage costs. Sunnyvale, California-based NetApp started the bidding war when it offered $25 a share in May.

Challenging EMC

The Data Domain deal puts pressure on International Business Machines Corp. and Hewlett-Packard, said Brent Bracelin, an analyst at Pacific Crest Securities in Portland, Oregon. “Buying NetApp is one way they could battle more effectively against EMC,” Bracelin said.

IBM doesn’t comment on rumor or speculation, said Ian Colley, a spokesman for the Armonk, New York-based company. Christina Schneider, a spokeswoman for Palo Alto, California- based Hewlett-Packard, also declined to comment.

NetApp said it gave up on Data Domain because it couldn’t justify the escalating bidding to shareholders. Data Domain’s products ensure that information isn’t duplicated in multiple places. That helps free up storage space, reducing the number of disk drives that companies have to buy.

To contact the reporter on this story: Rochelle Garner in San Francisco at rgarner4@bloomberg.net

Last Updated: July 9, 2009 16:13 EDT