Dell Chasing IBM, HP with 3PAR Acquisition, Analyst Says

 
 
By Nathan Eddy  |  Posted 2010-08-17 Email Print this article Print
 
 
 
 
 
 
 

Dell's acquisition of virtualized storage specialist 3PAR puts it in a better position to compete with HP and IBM, says a Technology Business Research analyst.

Technology giant Dell expanded its storage portfolio Monday with the $1.15 billion acquisition of 3PAR, a provider of virtualized storage solutions with data management features, including dynamic tiering and thin provisioning, for multitenant cloud-computing environments. Dell said it plans to make 3PAR an integral part of its storage portfolio, including PowerVault, EqualLogic and Dell/EMC.

Technology Business Research (TBR) analyst Greg Richardson said he believes the deal marks the next rung in Dell's ladder to becoming an enterprise solutions vendor, noting through large acquisitions, including Perot Systems, EqualLogic and, now, 3PAR, Dell is shedding the M.O. of high-volume PC and x86 server manufacturer to become a provider of need-based bundled solutions.

Richardson said the reshaping better positions Dell against competitors IBM and HP, which can address large-scale build-outs of integrated hardware and software with their services and software portfolios. "But, at the same time, Dell can play to its strengths in leveraging standard hardware," he noted. "3PAR's virtualized storage portfolio allows Dell to provide virtual environments that are built on x86 servers and high-end storage. By offering hardware and software that enabled the development of virtualized environments, as well as design, implementation and support services, Dell further positions itself as a solutions provider."

According to analysts, the addition of 3PAR to Dell's portfolio helps round out the storage portfolio it began expanding with its 2007 acquisition of EqualLogic, for which Dell paid $1.4 billion. "By coupling 3PAR's high-end SAN portfolio with the iSCSI portfolio of EqualLogic and its DAS and object-storage offerings, Dell has rounded out its storage portfolio, better positioning the company to penetrate markets up and down its stack," Richardson explained. "Additionally, by leveraging smaller, tuck-in acquisitions, such as the July purchase of Ocarina Networks, Dell has expanded its storage software portfolio to meet growing demand for storage efficiency and utilization tools."

By expanding its own storage portfolio, TBR analysts believe Dell has changed the dynamic of its relationship with EMC. Dell's acquisition of 3PAR comes a few months after the company's announcement that it will extend its relationship with EMC, as it aims to better align its offerings with need-based solutions. "We believe Dell is benefiting from 3PAR in that 3PAR technology helps to close the performance gap between x86 and proprietary servers," he said. "By leveraging 3PAR to expand its portfolio of enterprise-level virtualized storage, Dell will be able to go to market with a stronger set of integrated data center solutions. As Dell increasingly attaches storage to its compute capabilities, the company will benefit from more efficient sales, better positioning it for increased revenue growth."


 
 
 
 
Nathan Eddy is Associate Editor, Midmarket, at eWEEK.com. Before joining eWEEK.com, Nate was a writer with ChannelWeb and he served as an editor at FierceMarkets. He is a graduate of the Medill School of Journalism at Northwestern University.
 
 
 
 
 
 
 

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