Hewlett-Packard has offered to buy 3PAR, a vendor of virtualised storage systems, for $1.6 billion in cash, topping a bid of $1.15 billion made by Dell.
The offer will force 3PAR’s board to reconsider its merger agreement with Dell as the HP offer is a “superior proposal”, HP’s Chief Strategy and Technology Officer, Shane Robison believes. He claims that HP would be a better fit for 3PAR than would Dell, as both are Silicon Valley companies.
HP had been looking at 3PAR for some time, and there had been an earlier offering on the table, HP executives admit. 3PAR’s technologies will help HP expand its offerings for building public and private cloud services, according to Dave Donatelli, HP’s GM of enterprise servers, storage and networking. In addition, HP has “a unique ability” to bring 3PAR’s products to market. “Our reach is something other companies simply can’t match,” he said.
3PAR has gained notice for its ‘thin provisioning’ capabilities, which provide storage resources as needed. Thin provisioning is more efficient than traditional fat provisioning, which dedicates an excess amount of storage to an application in anticipation of growth.
HP’s move did not surprise Forrester Research analyst Andrew Reichman. “HP’s portfolio is disjointed and kind of incomplete. Storage is a hot area with a lot of spending. Having an end-to-end solution with servers, storage and networking is really critical right now.”
However, 3PAR’s technology does require some degree of hardware customisation, making HP’s decision somewhat surprising, he added. “But I think what this is saying is that they need more in terms of storage and they don’t feel they can reach the enterprise with what they have now.”
Meanwhile, it’s unclear what Dell will do. Its bid for 3PAR came shortly after moves to buy server provisioning vendor Scalent and storage optimisation provider Ocarina Networks. Dell should have gone after 3PAR first before pursuing other companies like Ocarina Networks, Reichman believes. “Without their own high-end storage platform it’s difficult for them to say they are truly relevant in the enterprise. I think the stakes are very high for both companies – there are not that many alternative choices.”