HP and Dell, big suitors for small company

3PAR's headquarters in Fremont, Calif.

TEXT OF STORY

Bill Radke: Our top story is, well, I'm going to call it computer dating. Hewlett-Packard and Dell are rivals again -- each of them seeking the hand of a company called 3PAR.

And who's 3PAR? Well, she's in the business of data storage, which I know, doesn't sound very sexy. So why are these big men on campus
competing so hard to win 3PAR's affections?

Marketplace's Janet Babin has the story.


Janet Babin: HP is bidding $1.6 billion for data storage firm 3PAR -- 33 percent more than what Dell agreed to pay for 3PAR last week. Why is data storage such a big deal?

Benjamin Woo is with research firm IDC.

Benjamin Woo: Whether it's ATM transactions, whether it's just going to a supermarket, it's all dependent on the storing and retrieval of information.

And that's essentially what 3PAR does -- it enables cloud computing that lets companies store data securely online. It organizes data on corporate servers.

Computer expert Dan Bricklin of Software Garden explains it like this: Say your company is doing an online promotion that could draw millions of customers to your site in a short span of time.

Dan Bricklin: Rather than buying 10 times extra computing power, you basically use it from a shared place on an hourly basis.

With 3PAR, firms gain more storage capacity during peak times without investing more money. With the recession constraining IT budgets, that makes 3PAR even more valuable. And it may be smarter for companies like HP and Dell to buy their way into data storage.

Karan Mehandru is a principal with early stage venture capital firm Trinity Ventures.

Karan Mehandru: They could take five years to develop the same product, but given that these companies are available relatively on the cheap side, I think it's probably a good decision at this point.

Mehandru expects Dell to counter offer, and another player could enter the fray, driving the price for 3PAR even higher.

I'm Janet Babin for Marketplace.

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