Dell’s 3PAR Buy Expands Its Enterprise Virtualization, Storage Portfolio

Dell has agreed to acquire IT storage provider 3PAR for approximately $1.15 billion, a move that will likely help Dell propel its enterprise strategy. 3PAR develops virtualized storage solutions with an emphasis on features such as thin provisioning.

Dell will incorporate 3PAR into a storage portfolio that includes PowerVault, EqualLogic and Dell/EMC. Dell claims that 3PAR’s assets, once fully baked into its offerings, will offer a combination of greater efficiencies and lower data-management costs. 3PAR’s multitenant, clustered architecture allows IT organizations to deliver both hardware and software as a service, in theory making it ideal for corporations looking for cloud-based storage options.

During an Aug. 16 conference call with media and analysts, Dell executives made it clear that they intended to rapidly grow their new acquisition, with expansions planned on both the engineering and sales side. 3PAR currently boasts more than 600 employees.

“We’re seeing increasing demand for a new class of storage,” Brad Anderson, senior vice president of Dell’s Enterprise Product Group, said during that call. “For businesses and models that provide storage as a utility, we think 3PAR is a fantastic addition to that lineup.”

Anderson also hinted that the acquisition played into Dell’s broader enterprise strategy, particularly as large businesses begin to gravitate toward the cloud for IT services such as storage. However, the potential advantages extend beyond storage.

“I hear they’re looking at it as a competitive differentiator, where they can claim a rich storage portfolio,” Roger Kay, an analyst with Endpoint Technologies Associates, said in an Aug. 16 interview with eWEEK, “which can then let them establish a beachhead in the enterprise where they can sell commodity servers.”

The 3PAR acquisition, in other words, helps Dell round out its enterprise portfolio.

“Because Dell is building a storage-asset base under its own roof, they can say: this is our technology. They’ve developed it, they’ve inherited a customer base,” Kay added. “If they had a weak point, storage would be it.”

A recent survey by TheInfoPro suggested that, as cash-strapped businesses spend more slowly on servers and other IT infrastructure, both Dell and Cisco Systems could benefit from a focus on competitive pricing. In addition, the survey found that IT pros were interested in reducing their number of physical servers via virtualization, another trend that plays into Dell’s corporate strategy.

On the consumer side of the equation, Dell is entering the tablet PC market with its 5-inch Streak, which went on presale Aug. 12. Dell likely hopes that the Streak’s ability to Web surf, display multimedia and make voice calls will help distinguish it from the Apple iPad, whose success added fuel to the consumer tablet category.