HP: Channel Would Help Bring 3Par Products To Market


Hewlett-Packard's channel partners could be a big differentiator in getting 3Par's technology to market ahead of rival Dell, according to HP. Dell had put in a bid to buy storage manufacturer 3Par last week.

"It is important to note that HP has the ability to bring 3Par storage solutions to market. We have the ability to sell through channel partners, direct sales and our enterprise services division. Other companies can't match that," said Dave Donatelli, executive vice president and general manager of Enterprise Servers, Storage and Networking for HP, during a conference call with analysts Monday after HP announced an offer of $24 per share for 3Par.

Later in the call, Donatelli was asked how much HP would utilize the channel to sell 3Par, which currently has a predominantly direct sales strategy. Donatelli didn't say whether VARs would become a primary route to market for 3Par products, but he did say, "What's great about us is we have multiple channels to market, including a large partner network. We have many routes to market that are not available to a smaller company and even to larger companies."

HP's offer of about $1.6 billion for 3Par comes a week after Dell had submitted a bid of $18 per share (about $1.16 billion).

Donatelli said HP has had discussions to buy 3Par for some time but would not clarify whether an original offer was rebuffed by 3Par. It was also unclear whether any original offer was made while Mark Hurd was still the HP CEO.

"We've done our due diligence on this deal prior to anything announced publicly," was all Donatelli would say.

It's unclear whether Dell would make another offer for 3Par to trump HP's latest offer. In a statement, Dell said it would not comment on ongoing M&A activity.

"We look forward to Dell's response,' said Donatelli on the call. "Our proposal clearly qualifies as a superior proposal. We're very excited about the prospect to acquire 3Par and its highly scalable storage systems."

He added that 3Par's technology would nicely complement HP's converged infrastructure strategy, which brings together formerly disparate technologies including servers, storage, networking and more.

"It's a unified solution that significantly reduces the complexity of the data center. We've seen incredible market momentum around converged infrastructure. Customers have embraced [it], HP has an unmatched portfolio and [3Par’s] enterprise-class public and private cloud environments would further diversify our offerings," Donatelli said.

Donatelli also touted HP's history of integrating large acquisitions seamlessly, including April's 3com purchase, "which is performing above plan" and LeftHand Networks in 2008, which delivered triple-digit year-over-year growth last quarter.

"We have a very strong internal business case around this asset. We believe this is an opportunity to grow revenue and grow it at a nice margin. We think we are uniquely positioned to execute transactions of this nature. With 3Com, we have more than 300 proofs of concept under way. A smaller company's problem is that customers want to buy from fewer, larger customers they trust. We're now getting 3Com into huge large accounts globally," Donatelli said. "We can take our scale and marry that with our technology. 3Par is very similar. They have great technology but do not know how to effectively bring it to market. That's where we can scale this asset very well."

 

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