“Both HP and Dell have very good reasons why they can’t afford to lose this,” Andrew Reichman, senior analyst at Forrester told V3.co.uk.
“It’s the only top tier storage vendor operation left to acquire.”
Dell is after the company because it is looking to transition into the enterprise server space and storage was a major gap in its portfolio. While the company sells plenty of servers it needs to move into selling large total solutions if it is to become a "mega-vendor", he explained.
There is also the question of the amount of effort Dell has put into buying other components of an enterprise offering, such as Perot Systems.
“They bought the garnishes, but now they need the entrée,” he said.
From HP’s perspective storage has traditionally been the weakest part of its offering to large enterprise he said, but by staying in the battle in such an aggressive manner the company would have difficulties walking away at this stage.
“They’ve really said our existing product set is not adequate. It’s tough to say we don’t need it.”
Part of the reason both companies are being so aggressive comes down to the underlying value of the technology, IDC’s vice president of storage Ben Woo told V3.co.uk.
Storage is the growth area in the enterprise market, with virtualisation slowing growth on server sales, and all the major players have to have an offering to survive.
Dell is currently relying on partners like EMC to supply sections of its overall enterprise offering while HP is using Hitachi systems which, while st ill very successful, are getting long in the tooth. Neither situation is ideal and both would benefit from the buy, although Dell would see a benefit first.
“Dell has no intention of integrating 3PAR, it’ll simply allow it to expand, the amount of integration needed is almost non-existent,” he said.
“HP will need to do a lot more integration with the company along the way before they see more solid results, but it will also see some immediate benefit.”
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