So there we have it. A week after Dell announce their intention to acquire 3Par, HP put their cards on the table and trump the Dell bid with an updated offer of $24 a share. This represents a 1/3 increase over the Dell $18/share offer.
HP have been pretty acquisitive in the storage arena over the last few years, acquiring LeftHand, Ibrix and others. Why now would they want to acquire 3Par?
- Defensive positioning – 3Par being acquired by any of the major vendors could weaken HP’s position in the mid-to-enterprise market. EVA is a fading product and unlikely to be the first choice for many organisations when choosing a mid-tier storage array (unless you’re an out and out HP shop of course). Maybe HP felt they had to protect their existing mid-market position.
- Technology Replacement - As I just mentioned, the EVA looks long in the tooth. Should HP replace or upgrade it? Acquiring 3Par could be the answer to that problem – use InServ as the EVA replacement. Goodbye EVA. Alternatively, 3Par could be a replacement for the XP range of devices that HP OEM from Hitachi. HDS are being brought closer to the Hitachi family (and making acquisitions of their own) so perhaps this is another defensive move on HP’s part, in case the Hitachi deal unravels.
Whatever the reason, HP & 3Par would create a large overlapping portfolio of similar products. I’m not sure where the clear strategy would be, or what the marketing message would say; which product is best for enterprise, mid, SME and so on.
Final thought: Will Dell rebid at a higher price? Will anyone else come into the bidding? Storage is clearly still hot acquisition territory.
8 Responses to HP Challenges Dell for 3Par
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This is no real surprise; the rumour mill had HP sniffing round EMC, which is a very bad cultural fit and would cost a lot of money, but they badly need to replace EVA and Hitachi are not looking likely to sell HDS. It looks like storage is one of the few places in the market where there is still margin, though for how long is anyone’s guess. If I were Dell I would buy NetApp instead, though
HP Challenges Dell for 3Par…
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The Storage Architect » Blog Archive » HP Challenges Dell for 3Par…
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[...] and gives them a chance to earn some additional enterprise credibility. An HP acquisition makes just as much sense, giving them fresh SAN technology and letting them pull ahead of Dell once again. A big deal like [...]
[...] recent proposed acquisition of 3Par by Dell and/or HP has made me think a little more about the direction the storage industry [...]
I doubt Dell will move to match that considering how long it has taken them to make a move and how vigorously HP presented their offer.
Jack
Well, HP have been technically outbid by Dell; only a small amount though. I’d expect HP will up their offer. It’s not finished yet.
Cheers
Chris