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Dell’s 3PAR Acquisition Bolsters Cloud Storage Presence

By Charlene O'Hanlon
August 16, 2010 - News

Dell has agreed to acquire 3PAR, a maker of virtualized storage solutions, in a deal worth $1.15 billion. The acquisition advances Dell’s presence in the cloud computing environment, especially in the large enterprise space.

“Over the last few years we have transformed our business from that of being a reseller to being an industry leader with a differentiated set of storage solutions and capabilities. We have continued to invest in our storage capabilities organically … and inorganically with the acquisition of Exenet and Ocarina networks. 3Par is another step in that direction," said Brad Anderson, senior vice president of Dell’s Enterprise Product Group. “It is a natural extension of Dell’s recent acquisition strategy and adds additional muscle to our intelligent data management solutions."

3PAR, which traditionally was sold both direct and indirect through the channel, brings to Dell a storage play in the growing area of cloud computing, which is expected to hit $160.2 billion by 2015, according to Research and Markets.

3PAR’s technology is well-known in its space. Its multitenant, clustered storage architecture is designed for companies that operate in agile, virtualized IT infrastructures for flexible workload consolidation.

“We believe 3PAR is the architecture of choice for delivering storage for the cloud and has been the leader in developing a new category of disk arrays called utility storage that are designed to be storage foundation for utility computing and cloud architectures," Anderson said.

Once the acquisition is complete, Dell s president, Large Enterprise, Stephen F. Schuckenbrock, said he expects the percentage of indirect sales will decrease, simply because most of Dell’s large enterprise sales are done directly. Currently, about 30 percent of 3PAR’s sales move through the channel.

“We intend to maintain our relationships with [3PAR’s] channel and expand them and leverage some of the EqualLogic channel in doing so," he said, referring to the channel partners Dell gained in its acquisition of storage provider EqualLogic in 2008. “There also are a number of resellers who are strong in large enterprise that are looking for higher-end storage solutions from us, and we think 3PAR opens those doors to us in way EqualLogic just wasn’t penetrating.

“We intend to support both direct and indirect sales, but we expect a greater percentage to move direct," he added.

David Scott, CEO of 3PAR, agreed. “In North America we developed a robust community of channel partners that are focused in larger scale enterprises, Web 2.0 and government, and we have been building out additional channel partner capacity. We see additional opportunity in partnering with Dell. Since its EqualLogic acquisition Dell’s channel has been built up and a number of those channel partners are looking for a higher-end storage solution. We see ourselves as a great opportunity to bring to the Dell channel."

The acquisition has been approved the shareholders of each company, and Dell expects the deal will close by the end of its fiscal year.

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