HP, Dell Lock Horns Over 3PAR

With 3PAR’s track record of profitability being less than inspiring, why would tech-giants Dell and Hewlett Packard even be interested in the company, let alone being pitted against one another in a bidding war? Apparently, it’s all about data storage, or “cloud computing“, which 3PAR appear to have developed to a degree that makes the company a worthwhile prize in a market that is rapidly expanding. Cloud computing offers companies the service of off-site data storage and access, and analysts anticipate corporate spending on this service is likely to reach more than $55 billion by 2014 – a growth of more than 25 percent per annum on the 2009 figure of $16.5 billion.

While HP currently offers its clients off-site data storage, Dell does not, and both companies would benefit tremendously from the 3PAR’s technology in order to compete in a market already catered for by IBM, EMC and Hitachi Data Systems. With HP’s latest offer of $30 per share pushing the value of 3PAR’s stock up by 211% since the tug-of-war between Dell and HP began, it certainly can be viewed as a superior proposal. Whether Dell will come back with a counter-offer remains to be seen, but there is no doubt that whichever way the board of 3PAR decide to go, its investors will be smiling.