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This presentation will outline the trends and forces driving the need for using the cloud as a tier in data protection in virtualization environments. We’ll discuss the data protection partnership required from the source of data, virtual machine disks and files inside of virtual machines, all the way to the cloud in order to successfully achieve data protection goals. This will include examples on how content-specific data reduction techniques virtualized disks can provide immediate value as the cloud becomes the next great tier in the data center storage hierarchy. Finally, we will examine the challenges as data reduction become more valuable as wire-usage optimization than as a disk-usage optimization.