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Dell, HP acquisition battle shows progress of cloud computing, hosted software

Dell, HP acquisition battle shows progress of cloud computing, hosted software

By eddieadams | August 30, 2010

Recently, PC heavyweights Dell and Hewlett-Packard have been engaging in a financial battle for cloud computing provider 3Par. During the last several weeks, both companies have one upped each other with what each believes to be a “superior” offer. The company offers reliable online back and disaster recovery solutions, which have proven as successful as other forms of cloud computing, including hosted software. While some are hesitant to move to the cloud, as companies once were with agile development and other IT processes, the battle between Dell and HP shows the cloud’s value.

3Par is a global provider of data-storage machines designed for cloud computing services, a commodity both hopeful companies deem as a technological advantage in today’s current IT market. Initially, HP made an offer of $ 1.5 billion for the company, after Dell had offered close to $ 400 million fewer. Since then, Dell offered $ 1.6 billion, which HP topped at $ 1.8 billion. Dell then matched the $ 1.8 billion offer, which forced HP to increase its bid to $ 2 billion, or nearly $ 30 a stock. Dell is now considering yet another counteroffer, which it has three days to issue, lest it concede the much-sought-after acquisition.

The battle between the two company highlights the increasing importance of cloud computing as a technology today. Dell has stated that 3Par is the best company providing cloud computing, which explains its desire to acquire it. Dell’s director of enterprise storage, Praveen Asthana, stated high-end utility storage is an upcoming business, and he felt that, at present, 3Par is the “best company to provide this service for those organizations who want to consolidate and virtualize their data centers in order to showcase IT as a utility,” reports Top News US.

Currently, more companies are turning toward online virtual networks and SaaS applications and leaving mainframes and hardware behind. In fact, a recent report from CloudTweaks stated 20 percent of businesses will be in the cloud during the next four years. The grip of the global recession during the last several years led many businesses to find cost-effective solutions for their IT responsibilities, which explains how the cloud grew to such prominence. A recent report from AMI-Partners found cloud computing spending will skyrocket among small- and medium-sized businesses during the next five years, reaching nearly $ 100 billion. The value in the cloud is in the flexibility it provides companies. Rather than having to do everything from the office, tasks suchs as updating an enterprise wiki or software database can be accomplished remotely.

Much speculation has followed the recent bidding war between Dell and HP, as many critics point to the fact that 3Par has never produced a profit in its three years being a public company. However, with the continued rise of cloud computing, HP or Dell might in fact be reaping the benefits soon with this acquisition.


Eddie Adams is a staff writer for Software Development News, often covering the topics of hosted software and hosted development.

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