HP launches rival bid for 3PAR

Hewlett-Packard has launched a rival bid for 3PAR, the storage technology vendor that Dell announced it was to acquire last week.

HP has offered $1.6 billion for the company, whose products are designed for use with virtual environments, roughly 40% more than Dell’s $1.13 billion bid.

"HP’s proposal offers superior value to 3PAR’s shareholders," Dave Donatelli, general manager of HP’s Enterprise Servers, Storage and Networking division. "Our global reach, strong routes to market and commitment to innovation uniquely position HP as the ideal fit for 3PAR."

Dell and 3PAR have yet to respond to HP’s bid.

As can be seen from the chart below, HP’s storage revenues are many hundreds of millions of dollars greater than Dell’s. The addition of 3PAR to Dell’s storage division would do little to close the gap in the short term; 3PAR’s revenues were $54.5 million in its most recent quarter.

HP’s apparent desire to own 3PAR is therefore an indication of the anticipated significance of its technology in future.

In a report published last year, analyst company Gartner that the improvements in flexibility that server virtualisation has brought to the server estate have not extended to the storage infrastructure. "Storage resources have not gained the extra flexibility of the server environment [as a result of virtualisation] but remain constant," the report said. "Server virtualisation techniques solve or alleviate server resource contention, but they do not resolve storage capacity or performance contention problems within the storage subsystem."

The report went on to say that achieving that flexibility for storage is not simply a matter of implementing storage virtualisation technology. Instead, it requires more sophisticated storage management tools, designed with virtual environments in mind. This is what 3PAR claims to sell.

The storage sector was the site of a high-profile bidding war last year, as EMC and NetApp battled to acquire deduplication vendor Data Domain. NetApp’s initial bid was for $1.5 billion but after a few rounds of oneupmanship EMC eventually won out with a $2.1 billion offer.

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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