HP trumps Dell’s 3Par bid with US$1.6 billion offer

Hewlett-Packard Co. (NYSE: HPQ) this morning said it has submitted a US$1.6 billion bid to buy 3Par, just a week after Dell Inc. (NASDAQ: DELL) had agreed to buy the virtualized storage maker for US$1.15 billion.

HP said that if the proposal, which is 33.3 per cent higher than Dell’s bid, is approved by the 3Par boad, the deal should close by year’s end.

The deal is not subject to any financing contingency, HP added.

HP officials said if the deal closes, the 3Par storage technology will be used as part of its Converged Infrastructure strategy, which includes storage, server and networking products.

“HP’s proposal offers superior value to 3PAR’s shareholders. Our global reach, strong routes to market and commitment to innovation uniquely position HP as the ideal fit for 3PAR,” said Dave Donatelli, HP executive vice-president and general manager, Enterprise Servers, Storage and Networking, in a statement.

“We’ve seen great momentum with our Converged Infrastructure strategy, and 3PAR accelerates that strategy, particularly in cloud and scale-out markets,” he added.

A maker of modular storage arrays that use virtualization and clustering to provide petabytes of storage capacity, 3Par is also, along with Compellent and Hewlett-Packard, among the most popular providers of thin-provisioning technology. Thin-provisioning products allocate storage capacity based on an application’s needs, in contrast to the more traditional approach of overprovisioning storage to ensure that it won’t run out.

Last year, Fremont-Calif.-based 3Par also introduced its third generation ASIC, which processes data and metadata independently in different processor and memory subsystems within an array’s controller. The offering eliminates the effect that sequential workloads — those used for data mining and backup — can have on transactional workloads such as databases.

Founded in 1999, 3Par offers clustered architecture that enables system administrators to deliver software and hardware as a service to business units for a more efficient storage infrastructure platform that is optimized for highly-virtualized data centers and cloud computing.

In announcing its bid last week, Dell said it hoped the move will boost its ability to deliver cloud-based offerings.

Along with its own line of PowerVault storage arrays, Dell sells rebranded storage through a long-standing reseller agreement with EMC and data de-duplication appliances through a deal with CommVault.

In 2007, Dell purchased EqualLogic for $1.4 billion so it could begin offering Internet SCSI (iSCSI) storage technology.

The iSCSI protocol is an IP-based specification that allows SCSI commands and data to be carried over Ethernet networks. By using iSCSI instead of Fibre Channel for a server-storage interconnect, companies can avoid the need to install expensive and specialized network adapters and switches, as well as the need to hire Fibre Channel-qualified network technicians. In most cases, iSCSI is used to consolidate storage for Wintel server farms.

Over the past five years or so, Dell has continued moving up the storage food chain, with products ranging from entry-level storage systems, such as the PowerVault NX1950, to midrange systems, such as its PS5000 series arrays. The addition of 3Par products positions the company for the enterprise.

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Jim Love, Chief Content Officer, IT World Canada

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