HP Gets 3Par Amid Hurd Mess

Analysts expect 3Par's grid storage technology to become a key part of the HP Enterprise Services product portfolio.

Hewlett-Packard Co. didn't allow the chaos surrounding the unseemly Aug. 6 departure of former CEO Mark Hurd blunt its pursuit of grid storage maker 3Par Inc.

After winning a weeks-long bidding war with Dell Inc. early this month, HP walked away with the Fremont, Calif.-based storage vendor for about $2.4 billion in cash. HP had thrice topped bids from Dell, whose final offer was $2 billion.

Analyst John Bender, who once ran HP's mergers and acquisitions group and oversaw the massive 2002 HP-Compaq merger, called the move to buy 3Par a good one for his former employer.

The deal lets HP control its storage technology -- it currently resells high-end arrays from Hitachi Data Systems Corp. -- while strategically keeping 3Par's well-regarded offerings out of the hands of rivals like Dell and Acer Inc., said Bender, who's now managing director of Bender Consulting.

And just as important, he added, HP needed a win after the contentious departure of Hurd, who resigned about a month ago in the face of a sexual harassment claim that led to the disclosure of some inaccurate expense reports. (Hurd was hired last week as co-president of Oracle Corp., and HP immediately filed a lawsuit charging that its former CEO had violated his severance agreement.)

Bender expects HP's Enterprise Services unit, formerly EDS, to aggressively sell 3Par products.

"There will be a strong link to EDS. Whether it's just from a professional services perspective to set it up for customers or a fully embedded business unit, time will tell," he said.

The big winner of the bidding war is 3Par, according to Arun Taneja, a consultant at Taneja Group, who said 3Par's CEO, David Scott, "is sitting there smiling, as is his staff and shareholders."

As for Dell, acquiring 3Par would have been a critical part of its plan to become a provider of a full line of data center products and services, according to analysts. The addition of 3Par's technology would have allowed Dell Services to add strong cloud offerings to its product catalog, they said.

However, "Dell has a major problem right now," Bender contended. "They have to consider whether or not they should take the money they would have spent on 3Par and develop those capabilities internally."

Computerworld reporter Patrick Thibodeau contributed to this story.


Copyright © 2010 IDG Communications, Inc.

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