Dell to buy 3PAR for $1.15B

Purchase of the virtualized storage provider will increase Dell's reach into cloud computing

Dell this morning announced that it has agreed to purchase 3Par, a maker of virtualized storage, in an all-cash deal worth about $1.15 billion.

Dell hopes the move will boost its ability to deliver cloud-based offerings.

A maker of modular storage arrays that use virtualization and clustering to provide petabytes of storage capacity, 3Par is also, along with Compellent and Hewlett-Packard, among the most popular providers of thin-provisioning technology. Thin-provisioning products allocate storage capacity based on an application's needs, in contrast to the more traditional approach of overprovisioning storage to ensure that it won't run out.

Last year, Fremont-Calif.-based 3Par also introduced its third generation ASIC, which processes data and metadata independently in different processor and memory subsystems within an array's controller. The offering eliminates the effect that sequential workloads -- those used for data mining and backup -- can have on transactional workloads such as databases.

Founded in 1999, 3Par offers clustered architecture that enables system administrators to deliver software and hardware as a service to business units for a more efficient storage infrastructure platform that is optimized for highly-virtualized data centers and cloud computing.

Along with its own line of PowerVault storage arrays, Dell sells rebranded storage through a long-standing reseller agreement with EMC and data de-duplication appliances through a deal with CommVault.

In 2007, Dell purchased EqualLogic for $1.4 billion so it could begin offering Internet SCSI (iSCSI) storage technology.

The iSCSI protocol is an IP-based specification that allows SCSI commands and data to be carried over Ethernet networks. By using iSCSI instead of Fibre Channel for a server-storage interconnect, companies can avoid the need to install expensive and specialized network adapters and switches, as well as the need to hire Fibre Channel-qualified network technicians. In most cases, iSCSI is used to consolidate storage for Wintel server farms.

Over the past five years or so, Dell has continued moving up the storage food chain, with products ranging from entry-level storage systems, such as the PowerVault NX1950, to midrange systems, such as its PS5000 series arrays. The addition of 3Par products positions the company for the enterprise.

Dell said that after the deal closes it plans to expand the engineering and sales operations of 11-year-old 3Par. There are no plans to move the acquired company's current operations.

Under the terms of the agreement, Dell will commence a tender offer to acquire all of the outstanding common stock of 3PAR for $18 per share in cash. The transaction, which is subject to customary closing conditions, is expected to close by the end of the year.

Lucas Mearian covers storage, disaster recovery and business continuity, financial services infrastructure and health care IT for Computerworld. Follow Lucas on Twitter at @lucasmearian, or subscribe to Lucas's RSS feed . His e-mail address is

Copyright © 2010 IDG Communications, Inc.

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