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Summary:

At first look, the idea of Hewlett-Packard paying $1.6 billion for 3PAR and outbidding makes no sense. But it needs 3PAR in order to compete with EMC, IBM and Hitachi Data Systems in the storage arena. Too bad that leaves Dell out in the cold.

Just one week ago, Dell announced their intent to acquire 3PAR. (See The Simple Reason Dell Bought 3PAR.) Yesterday, HP showed that even elephants can dance and jumped into the fray with a $1.6 billion bid, about one-third higher than Dell’s original $1.15 billion offer.

In my first take on the deal, I lamented that perhaps HP could not get its act together in time with the CEO search on its plate, and that HP was essentially being left out of the new high-end storage quartet, which was expected to be EMC, IBM, Hitachi Data Systems, and the newly-minted Dell/3PAR just a few days ago. Now it appears neither is true.

HP has a lot more to gain — or lose — from this deal than Dell. Now that it’s playing the game, I believe the company will play to win — spending more than Dell ever will — making this a good time to be a 3PAR employee or shareholder. The reason HP can, will, and should pay more is that it has a tested and proven sales channel for high-end enterprise products, including storage, that Dell can only hope to achieve in the next few years.

HP has been selling high-end storage systems from Hitachi Data Systems that compete with EMC and IBM. It knows how to win deals. Not all of them, but plenty, and it has a rich history of high-end UNIX expertise that will play well for large distributed cloud infrastructure where solutions like 3Par could provide an advantage.

Dell has a history of selling PCs and grew into the server space with formidable might. However, it doesn’t have the size and caliber of a sales force that an HP does to give 3PAR sales a turbo boost. Simply put, HP is likely to see a far more rapid increase in 3PAR revenues than Dell. As Om pointed out, 3Par grew a mere 5 percent last year, so getting revenues up a notch will be a priority for any suitor.

It seems unlikely that any other companies will throw their hat in the ring for 3PAR, so I’m placing my bet on HP now. But we’ve seen crazier things happen.

Related Research from GigaOM ProInfrastructure Overview, Q2 2010

Gary Orenstein is Host of The Cloud Computing Show

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