Michael Ansaldo from PC World explains why HP entered into a bidding war with Dell to acquire storage service provider 3Par:
The unlikely battle of these PC behemoths over a small Fremont, CA data-storage company emphasizes the storage market's continuing shift toward enterprise cloud computing. Thanks to the recession, more corporate clients are embracing the kind of affordable virtualized storage that companies like 3Par provide.
The fight for 3Par is undoubtedly fueled by the fact that Both Dell and HP have seen their "beige box" business falter as personal computing evolves toward handheld devices. At the same time, however, both companies have lead the growth in the server market. As that business migrates toward the promise of cloud computing, it's not hard to see why the two companies are vying for a seat at the table..
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Re: Why Dell and HP are bidding on 3Par by Anonymous on Tuesday, August 31 2010 @ 07:05:01 CEST
No this bidding is fueled by investment bankers (who stand to benefit from these transactions) saying just how much 3PAR would add to the balance sheet. The "value" is almost never realized over just building a business on one's own unless there are exclusive clientele or brandnames to be had, which isn't at all what 3PAR has to offer.
This is investment bankers wanting their paycheck along with some good old fashioned "you won't outbid me" bidding that has gotten vastly out of hand. In the end years down the road the purchaser almost always loses large sums of cash, with the executives of 3PAR and the investment bankers walking off millionaires.
Show us the cash stream you expect to generate and exactly how you think it will happen before shareholders should approve this lunacy. Want a cloud storage company? Buy some servers and get started. Barrier to competition is practically non existent. In fact as hardware keeps getting cheaper, it actually becomes easier for competitors to walk in on the game a year or two or more after you started up, and beat you at your own game.