There is nothing that industry investors enjoy more than the sight of two vendors slugging it out over the assets of a small company. While the recent Sun acquisition was conducted behind closed doors, Net App and EMC are squaring up for a good old fashioned street fight.

Until two years ago, you would come across a small to mid-sized company in the technology market and one of your first questions would be - what's the end game? Who do you want to sell out to? If you think that overly cynical, think again. The tech landscape is littered with companies who had a great idea, produced a good working early product and who then sat back and waited for the bids to come in.

In the current market that isn't the case. Those companies that do have cash reserves are holding on to them or are prepared to wait for prices to hit rock bottom before they start buying. Not so in the storage sector which has been one of the most buoyant parts of the tech industry for a while.

Now in deference to Data Domain, they are not a mid sized enterprise, they are a $250m a year company that has carved out a niche for itself and can easily be seen as a market leader. However, when you have two other vendors fighting over you and driving your stock price to 12 months highs, it has to feel good.

Both Net App and EMC clearly want Data Domain to ensure that they get control of the next generation backup and archiving market. Both companies have their own products but Data Domain brings them market leadership, a nice customer base and will be profitable within the first year.

However, there are risks to the current battle. After EMC valued Data Domain at $1.8bn, Net App has increased that valuation to $1.9bn. This takes the price close to seven times the turnover of Net App in the last year and means that both vendors are starting to get to that point where profitable turns to neutral and risks turning to a loss in the first year.

Shareholders in both protagonists seem to think the same. While share prices were down less than a dollar for both vendors, they have both lost value while Data Domain has gained. In fact, Data Domain is now trading at over $32 per share as of today.

Net App's revised offer - $30 per share - is the same as EMC offered two days ago. However, through careful manipulation of tax and by offering a combined stock and cash deal subject to various adjustments, Net App claims that it is worth $100m more to Data Domain shareholders than EMC's offer.

Net App is also talking up things like the cultural compatibility between the two companies and the fact that it believes there are no obstacles to completing these deal. However, it is also fair to say that there are few if any regulatory issues between EMC and Data Domain.

Both companies believe that they can offer Data Domain a much larger pool of customers to sell its deduplication software to but if they own you, the size of the pool is irrelevant unless there are hidden provisions allowing existing Data Domain management to pick up bonus payments based around future sales and this is a distinct possibility.

EMC has already said that it will run Data Domain as a separate division alongside RSA, VMware and Iomega. This would certainly be attractive for Data Domain as they would retain their independence. However, unlike the other divisions inside EMC, Data Domain would be heavily focused on cross selling to other parts of the EMC business.

Net App, by contrast, has shied away from talking about Data Domain having any independence and instead focused on the combined product portfolio. This might not be so attractive to Data Domain shareholders who are still employed by the company no matter what they get for their shares.