3Par for the course

When a bidding war finally comes to an end, it’s a good time to take stock of what all the fighting was about.

Mind you, never in my career can I recall as public a tussle over a single acquisition than the one that played about between HP and Dell over 3Par over the last couple of weeks. The only thing that seems even close was PeopleSoft’s decision to acquire J.D. Edwards, followed by Oracle’s decision to acquire PeopleSoft a few days later. The move seemed primarily a defensive one; spend what you need to make sure your rival doesn’t get bigger and stronger. This seemed consistent with the 3Par saga, too. While got the ball rolling with Dell’s initial bid, HP’s tit-for-tat became increasingly reactive, even desperate. Would owning 3Par really have made Dell all that more formidable?

It’s interesting to look back and see how the two rivals first positioned the potential benefits of the acquisition. “Dell Agrees To Acquire 3PAR For Virtualization-Optimized Storage,” the press release read, along with bullet points that indicated 3Par could help Dell bring customers into the “virtual era” of cloud computing. HP’s counter-offer was more oblique. “The addition of 3PAR’s next-generation storage architecture will accelerate HP’s winning Converged Infrastructure strategy,” its press release said, “which provides customers with an unmatched portfolio of intellectual property across storage, server and networking solutions.” Whatever. While Dell was offering visions of 90 per cent cost reductions in storage administration, HP implied it was simply building on its momentum.

Beyond the drama and spectacle of watching these firms out-bid one another, a more subtle possibility is emerging: that the virtualization and cloud computing strategies being offered by vendors are not living up to expectations, in part because of the hidden expenditures associated with mass volumes of data and storage-hungry applications. Virtualization can make one server act like many, but that doesn’t mean the storage needs disappear. Moving to the cloud, even in the hotly contested “private cloud scenario” could exacerbate these issues. Many companies like to ward off potential capacity threats by building in more than they need, an approach otherwise known as “fat provisioning.” 3Par’s thin provisioning technology promises to allow companies to act more in the moment, carrying a lighter storage footprint and turn some of the claims about virtualization and cloud computing into a reality. It could be an important step towards maturity in this space.

Dell already has a strong relationship with EMC, but the 3Par move would have made it much more independent. HP’s victory in the bidding war means its relationship with Hitachi could change considerably. Dell’s certainly not going to buy Hitachi, and there are few other major infrastructure vendors who would require such features at the large enterprise level except IBM, which likely will keep to its in-house approach to storage.

Even though HP won 3Par in the end, it might be a good idea for IT managers to revisit Dell’s promises about the company. Can HP now offer that 75 per cent reduction in infrastructure costs that Dell did? Can data management costs be reduced by 50 per cent? As for Dell, it can’t afford to walk away from those customer benefits. It will need even stronger partnerships to provide the kind of storage scalability that a big-time virutalization and cloud computing initiative will demand.

HP may not have needed 3Par as badly as Dell did, but that doesn’t matter. This was about warding off a competitive threat before it became too serious, doing what you need to do at the time. Forget about thin provisioning as a technology. As it waits to find its next CEO, HP is applying thin provisioning as corporate philosophy.

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Jim Love, Chief Content Officer, IT World Canada
Shane Schick
Shane Schickhttp://shaneschick.com
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