Who The Heck Is 3Par? And Why Are HP, Dell In A Tizzy?

Who The Heck Is 3Par? And Why Are HP, Dell In A Tizzy?
By Scott Campbell, CRN 9:27 AM EST Tue. Aug. 24, 2010

A blog on 3Par's own Web site captures it perfectly: "Quite suddenly, 3Par is a very hot company."

Indeed. As Hewlett-Packard (NYSE:HPQ) and Dell (NSDQ:Dell) engage in a bidding war for the storage company, many solution providers are no doubt wondering exactly who this company is and why all the fuss.

3Par reported $168 million in sales for the fiscal year ended March 31, and it is a public company. It has almost no channel presence in the U.S. Its 3Par Champions channel partner program is only available in countries without a direct-sales presence, according to 3Par's Web site. That excludes North America, the United Kingdom and Germany.

The company's direct-sales force in the U.S. has worked with some solution providers in the past, Ashby Lincoln, president of VeriStore Systems, an Atlanta-based storage solution provider, told CRN in November 2007 after 3Par went public.

3Par was formed by a group of server-cluster engineers from Sun Microsystems
(NSDQ:JAVA) and has spent the past decade developing and selling large-scale storage products designed for cloud-based IT environments, according to the company's Web site.

It's that word, "cloud," that seems to have HP and Dell (and others?) all in a tizzy. Both of those vendors believe 3Par can accelerate their strategy in what HP called "converged infrastructure" during its call with analysts on Monday to explain its interest in 3Par.

HP has offered $24 per share , or $1.6 billion, upping Dell's original offer of $18 per share , or $1.16 billion, from last week. Now Bloomberg is reporting that Dell appears to be ready to sweeten its original bid. And there's talk that other vendors might be looking at the company, or at least might have before the bids got so high.

Interest in 3Par dates back to at least January, when Barron's reported that the company's virtualization and thin provisioning technologies made it a prime acquisition target.

3Par's blog post Monday tries to explain all the sudden interest.

"We've been very successful with our cloud strategy and have 7 of the top 10 IAAS (infrastructure-as-a-service) customers as clients. 3Par products work very hard in the background for a lot of household-name customers. Most people don't know or care," the blog post read. "However, cloud industry vendors know 3Par because they are also very heavily involved with those same customers, competing with their own products. They see our storage systems in those large data centers and our customers tell them that they need to make sure they work with us. There's nothing unusual about that sort of thing, but we definitely are a player."

Brian Alexander, managing director of equity research at Raymond James & Associates, wrote Monday that HP (NYSE:HPQ) is willing to pay such a lofty valuation because 3Par's tiering and multitenancy features would complement its existing storage technologies.

"These two features are critical for selling into the emerging cloud computing market and are also features that HP's EVA storage line is currently lacking," Alexander wrote in a report about HP's bid.

3Par claims to do three things very well: handle mixed workloads in multitenant environments, operate efficiently at high utilizations and give administrators the highest levels of automation.

"The thing that we didn't completely understand at 3Par was how quickly the onset of the virtualized data center was going to tilt the storage world in our direction," the company wrote in the blog. "3Par storage systems are based on a highly advanced, granular storage architecture. It's not always the easiest thing for people to understand because it is so different than any other vendor's architecture. However, people familiar with virtualized server features have a much easier time understanding how our technology works."

3Par admits that it isn't as well known as larger competitors, a facet that has cost it some deals, but with HP and Dell both battling for its expertise, that appears ready to change soon.



  1. 3Par could certainly use some help in penetrating the US market. Why not use channel management services offered by experts on the subject?


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