Why do Dell and HP want 3par so bad? Look to the clouds.
August 30, 2010
As I write this HP has again upped the ante in its bidding war with Dell over 3par. The whole thing started with Dell offering just over a billion dollars for 3par. Then HP made a counter offer, Dell countered the counter, and now it $2 billion on the table for 3par.
What is going on here? For Dell it’s about building large enterprise data center cred in storage. For both companies it is about the cloud.
A few years back there was a curious anomaly with storage offerings from both Dell and HP. Both companies had been champions and beneficiaries of distributed processing based on industry standard (ie x86/x64) servers. Yet when organizations wanted to have storage shared between networks of Windows or Linux servers Dell and HP were offering storage solutions that had more in common with larger scale computing – “little iron” versions of big iron fiber channel storage arrays.
If you were interested in putting together a processing pool of virtualized industry standard servers and, and wanted to marry that to a concurrent storage pool based on a industry standard building blocks in some kind of virtualized grid, you had to go to iSCSI clusters from the likes of EqualLogic and LeftHand Networks.
This anomaly was resolved when Dell and HP bought EqualLogic and Lefthand respectively. Now the standardized building blocks for both storage and servers were coming from the same companies. It was a good move. In August 2010 earnings reports Dell had storage up 13% and revenues from EqualLogic sales up 63%.
Another item of note from the earnings reports of both Dell and HP is that all the growth right now is in the corporate space. Consumer spending on PCs (bread and butter of both Dell and HP) is flat. Dell has been aggressive in trying to expand its presence in the data center beyond commodity servers. In this they need and want an enterprise class storage product.
HP and Dell are following the money. Where is the money going? Increasingly it is heading to the clouds – both internal and external compute clouds. Those commodity servers that can be clustered together and virtualized for processing pools have evolved to ever larger grids in compute clouds.
Enterprises building clouds need a ton of storage. Traditional big iron storage is seen as too expensive. They want something more cloud-like, more like a utility, a virtualized grid of storage building blocks to match the grid of processing building blocks. But they also need something higher up the food chain – a utility model but something more enterprise class in terms of performance and capacity.
This is where 3Par comes in. 3Par has always had a good storage story to tell – a scalable virtualized storage grid that maximizes utilization of physical storage assets. What has impressed me further over the years is 3par’s ability to leverage that story for the tech trend du jour.
For example, 3par was a pioneer of thin provisioning, the ability to present a storage volume of adequate size to a server but only use the amount of storage required to actually store data. So a server might “see” a required terabyte of space for an application but on disk it is only taking up say 300 gigabytes.
Thin provisioning was and is a solid feature for maximizing utilization and reducing waste. Less actual storage behind the veil of storage virtualization means less disk required. When “green” became the data center buzzword of the day a few years back, 3par’s lower waste, higher utilization storage became “green storage”. Less spinning disk means lower power consumption per terabyte stored.
Similarly today we are in the era of cloud buzz. From virtualization to server consolidation what we were calling in the past a utility infrastructure is now being re-branded as cloud computing. 3par has always had a model that was ideal for utility infrastructure, or at least the storage component of utility infrastructure. So just as boring old storage utilization became buzz-worthy green computing, utility storage is now an essential ingredient for building a cloud.
Who will 3par end up with? I think that Dell needs 3par a little more as they have more work to do to prove themselves a legitimate data center player. But they can both certainly use 3par. The winner will get a solid piece for their cloud business. The consolation for the loser will be knowledge that they made the other people spend a huge amount of capital for the privilege.
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