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HP Better Positioned Against Cisco With 3Par Acquisition

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Hewlett-Packard's intended merger with cloud storage provider 3Par will strengthen the firm's competitive thrust against archrival Cisco, which has been strong in the joined markets of data centers and cloud computing. HP needed more storage clout to complement its recent acquisition of 3Com, which it picked up for its networking prowess.

"HP and 3Par is a winning combination that will accelerate HP's Converged Infrastructure strategy," said HP's Dave Donatelli after his firm Thursday won the spirited bidding contest for 3Par with Dell. "We intend to invest in 3Par's technology to create long-term value."

In referring to its "Converged Infrastructure" strategy, HP noted that it is focusing on its storage, server, and networking portfolio. 3Par will beef up the storage operation.

Donatelli no doubt knows well what HP faces when the company competes with Cisco in data centers and cloud computing. Last year Donatelli was running a $6 billion storage operation at EMC, which is closely allied with Cisco. Now executive VP and general manager of enterprise servers, storage, and networking at HP, Donatelli was restricted from storage activities at HP until recently.

The Cisco-EMC combination -- strengthened by their joint ownership of VMware -- is the elephant in the cloud computing data center, but HP's acquisition of 3Par gives HP a beefed up weapon to compete with Cisco and EMC in the area. 3Par's thin-provisioning utility approach to storage becomes more attractive to enterprises now that it has the HP resources behind it.

3Par will also help HP compete with other strong contenders in data centers and cloud computing like IBM, Oracle, and Dell.

"As part of HP, 3Par's agile, efficient storage solutions will truly thrive, particularly given HP's ability to accelerate investment in our products and reach new customers around the world," said David Scott, 3Par's president and CEO. He also hailed HP's "global reach, strong routes to market and our shared culture of innovation."

Scott is a happy man these days. He watched his 3Par stock inflate during the bidding contest between HP and Dell from less than $10 a share to $33 a share, driving his personal stock holdings in 3Par to more than $95 million, according to media reports.

For Further Reading

HP Looks To Deny Dell Access To The Data Center

HP Wins 3Par Bidding War At $33

EMC Seeks To Block Former Exec From HP Job