The bidding war for 3Par ramped up this week when HP raised its offer to $30 per share, a $3 increase over Dell's bid, bringing the bidding to $2 billion. Dell had launched the opening salvo in mid-August when it had offered just over $1 billion to buy 3Par. As of this writing, 3Par had deemed HP's bid "superior" and Dell was mulling over its response.
The unlikely battle of these PC behemoths over a small Fremont, CA data-storage company emphasizes the storage market's continuing shift toward enterprise cloud computing. Thanks to the recession, more corporate clients are embracing the kind of affordable virtualized storage that companies like 3Par provide.
The fight for 3Par is undoubtedly fueled by the fact that Both Dell and HP have seen their "beige box" business falter as personal computing evolves toward handheld devices. At the same time, however, both companies have lead the growth in the server market. As that business migrates toward the promise of cloud computing, it's not hard to see why the two companies are vying for a seat at the table.
Cloud computing offers several indisputable advantages for small businesses. It reduces upfront costs, as the initial infrastructure is paid for by the cloud storage provider - no small break for small business owners, who constantly struggle to keep costs down. As it negates the need for vast on-site data centers, it also reduces the need to employ a large in-house IT staff. And because multiple customers share resources in the cloud model, it further lowers ongoing costs.
Whichever company ultimately comes out on top in the bidding war will undoubtedly incorporate 3Par's virtual storage solutions into its already robust storage portfolio. The acquisition will position either HP or Dell as a one-stop storage solution with greater production and cost efficiencies, which should make it pretty attractive for cash-strapped customers looking to pare down the number of physical servers and decentralize their data in the cloud.
It's still not clear which PC giant will end up owning 3Par. Dell has three business days beginning Monday to announce whether it will counter HP's $2 billion bid or concede. Regardless of which company triumphs, ultimately, small businesses may come out the winner.