Hewlett-Packard's sudden spoiler made Dell's acquisition of 3PAR company become awkward.
On August 23, Hewlett-Packard announced that it would submit an offer of about $1.6 billion to 3PAR, which is about one-third more expensive than Dell's purchase price announced a week ago. It said in a press communique that day that it plans to use cash to acquire all 3PAR publicly listed shares at a purchase price of $24 per share.
On August 16, Dell announced the acquisition of 3PAR, a data storage company, at a price of US$18 per share, with a transaction volume of approximately US$1.15 billion. Compared to the closing price of $9.35 for 3PAR announced the acquisition, Dell's per-share purchase price premium is 86.5%. It is said that the cost of this transaction will be included in Dell's financial report for fiscal year 2012. The board of directors of both parties has approved the transaction. 3PAR's CEO David Scott said that after the acquisition, 3PAR will become a subsidiary of Dell.
Founded in 1999, 3PAR is a high-end storage system manufacturer that helps companies more efficiently store and manage data through virtualization technology. Compared with storage giants such as EMC, Hitachi, Hewlett-Packard and IBM, 3PAR is not very big, but it is the only independent small and medium-sized storage company on the market that competes with the strong ones. Nonetheless, Scott is very confident with Dell's cooperation. He said, "For players in this market, if they can neither update the product nor provide customers with more choices, then they are in danger. "He also said that after the completion of the acquisition transaction, Dell will retain 3PAR's technology and sales team and continue to invest in enhancing these capabilities."
For the bid between Dell and Hewlett-Packard, analyst Jason Norland bluntly pointed out that "In fact, even we feel a little bit confused, because 3PAR is already not a day or two of things. However, Just as an investor once said to me, before a product is put on the shelf, buyers never really pay attention to it."
Compared to HP’s frequent acquisitions, Dell’s actions have been considered low-key and conservative by Wall Street investors and have lagged behind its rivals. In recent years, Dell’s rival companies Hewlett-Packard and IBM have frequently acquired to expand the corresponding market share.
For Dell's acquisition of 3PAR, Charles King, principal analyst at Pund-IT Market Research in the United States, said, "Dell has taken an important step in repositioning itself."
Unlike the PC business, the storage business is not the beginning of Dell's establishment. On the contrary, this part of the business in Dell's emergence can be described as "torture twists and turns."
As early as 2001, Dell signed a series of cooperation agreements with the storage giant EMC, Dell resell EMC's entry-level and midrange storage arrays, and data domain deduplication devices. The partnership lasted for more than a decade, bringing billions of dollars in revenue to both parties.
For EMC, the agreement brings in more than 10% of EMC's total revenue. According to relevant research data, the revenue generated by the two partnerships is approximately 25% of Dell's total storage revenue. However, in the context of subsequent developments, Dell is increasingly clear that it has a signal - it has its own storage product line.
In November 2007, Dell acquired EqualLogic, a storage solution provider, for US$1.4 billion, which at that time created a phased new high for the Dell acquisition.
According to data from Dell's related financial reports, after the completion of the acquisition of EqualLogic, the annual revenue of its products rose from the original 100 million US dollars to the current 800 million US dollars.
Today, in the face of Dell's repurchase of 3PAR, the industry believes that Michael Dell's ambition is not only to share in the SME market, but also in the high-end market with EMC, Hitachi, IBM and other storage giants.
Dell has been saying that the new acquisition will not affect the cooperative relationship with EMC. Brad Anderson, the company’s vice president, said, “EMC is a very important partner for us and our plan will not change any of the original cooperation. Dell is a company that likes to choose, and now we have provided a choice. He pointed out that Dell has never resold EMC's high-end series. After Dell acquires 3PAR, there will be no overlap or competition between the two companies in this product area.
However, the industry does not believe that Dell and EMC will be long-term friendly. The well-known technology blogger Gigaom wrote that it is only a matter of time before Dell and its partners break apart.
In fact, the competition between 3PAR and EMC was already arrogant before it was acquired by Dell. Previously, 3PAR had named a memory E-MC256, which made EMC unhappy and eventually 3PAR renamed the product XP256.
Charles King pointed out that "From a technology or business perspective, Dell and 3PAR's transaction has a significant meaning for both parties. With Dell's sales channels and high cash flow as a support, 3PAR can best explore its potential. â€
With Dell's layout storage market, the industry has pointed out that since the competition in the storage market will be more intense, the giants will each move: IBM will continue to sell integrated storage solutions to customers, EMC will not sit in the way of partners erode Its market share, and HP will be the most vulnerable, because so far, its high-end storage products still need Hitachi to provide hardware and some software.
Diversified operations Looking at Dell's entire game, expanding storage product lines may be just one step.
Mark Pitts, an analyst at Enterprise Strategy Group, believes that Dell's acquisition of 3PAR has little to do with storage products. What Dell wants to do is to become a one-stop solution provider like HP and IBM to enter the enterprise market.
It is worth noting that when Dell executives responded to the purchase of 3PAR, they said that the acquisition is an opportunity to enter the high-profit corporate market. Sensitive observers pointed out that this may be the first time Dell executives use the term "high profit." For a long time, Dell's financial report has been relying on low-profit PC business.
HP's total revenue for fiscal 2009 was $116 billion, compared to Dell's $53 billion in revenue for the same period, which is less than half of HP's. Among them, PC business still accounted for more than half of Dell's revenue, and this part of HP's revenue is only one-third. The US "Weekly News" once reported that excessive reliance on PCs has pushed Dell into a meager position, and its operating profit margin has only remained at around 5%.
However, Michael Dell has been committed to promoting the diversification of the company since he took the helm again in 2007.
In June 2009, Dell dug up David Johnson, IBM’s former M&A executive, to make up for Dell’s lack of acquisition experience. Following the acquisition of EualLogic for $1.4 billion in 2007, in September 2009, the company again acquired Perot Systems for $3.9 billion.
At the time, analyst U.S. bank Maynard Udov predicted in a report before the acquisition that Dell’s hardware business will continue to be under competitive pressure and its products will inevitably become daily necessities. In this case, service business can help them improve profitability. "We believe that service should become the focus of Dell." Wu said.
Subsequently, Dell's actions are still frequent. In July, Dell announced the acquisition of data center software company Scalent; shortly afterwards reached an agreement with Juniper Networks on data center security; on August 17, Dell signed a multi-year strategic agreement with original equipment manufacturer Aruba. The sale of its wireless products has expanded Dell's network product portfolio.
In this regard, the industry also has the view that Dell's next goal or will be the network equipment company. Currently, there is a lack of network equipment connected to servers and storage in the Dell product line. Broadcom may be its potential acquisition target. How long will it take for Dell to achieve the transformation of its business architecture? This is not known. But Bernstein analyst Tony Sarkozychi pointed out in a research report that IBM also made a ten-year acquisition to make a fundamental change in its revenue structure. He pointed out that since 2002, IBM has completed 78 acquisitions and acquired 75 software and service companies.
In the current "one-stop" model, competition in the corporate market has become more intense. On August 17, Hewlett-Packard announced the acquisition of Fortune Software, a network security vendor. After the acquisition, HP will provide a complete set of industry-leading network security solutions to help companies reduce business risks and prevent malware attacks. During the same period, IBM, Cisco, Oracle and other companies are also waiting to find the next "prey" to expand their right to speak in this market.
On August 23, Hewlett-Packard announced that it would submit an offer of about $1.6 billion to 3PAR, which is about one-third more expensive than Dell's purchase price announced a week ago. It said in a press communique that day that it plans to use cash to acquire all 3PAR publicly listed shares at a purchase price of $24 per share.
On August 16, Dell announced the acquisition of 3PAR, a data storage company, at a price of US$18 per share, with a transaction volume of approximately US$1.15 billion. Compared to the closing price of $9.35 for 3PAR announced the acquisition, Dell's per-share purchase price premium is 86.5%. It is said that the cost of this transaction will be included in Dell's financial report for fiscal year 2012. The board of directors of both parties has approved the transaction. 3PAR's CEO David Scott said that after the acquisition, 3PAR will become a subsidiary of Dell.
Founded in 1999, 3PAR is a high-end storage system manufacturer that helps companies more efficiently store and manage data through virtualization technology. Compared with storage giants such as EMC, Hitachi, Hewlett-Packard and IBM, 3PAR is not very big, but it is the only independent small and medium-sized storage company on the market that competes with the strong ones. Nonetheless, Scott is very confident with Dell's cooperation. He said, "For players in this market, if they can neither update the product nor provide customers with more choices, then they are in danger. "He also said that after the completion of the acquisition transaction, Dell will retain 3PAR's technology and sales team and continue to invest in enhancing these capabilities."
For the bid between Dell and Hewlett-Packard, analyst Jason Norland bluntly pointed out that "In fact, even we feel a little bit confused, because 3PAR is already not a day or two of things. However, Just as an investor once said to me, before a product is put on the shelf, buyers never really pay attention to it."
Compared to HP’s frequent acquisitions, Dell’s actions have been considered low-key and conservative by Wall Street investors and have lagged behind its rivals. In recent years, Dell’s rival companies Hewlett-Packard and IBM have frequently acquired to expand the corresponding market share.
For Dell's acquisition of 3PAR, Charles King, principal analyst at Pund-IT Market Research in the United States, said, "Dell has taken an important step in repositioning itself."
Unlike the PC business, the storage business is not the beginning of Dell's establishment. On the contrary, this part of the business in Dell's emergence can be described as "torture twists and turns."
As early as 2001, Dell signed a series of cooperation agreements with the storage giant EMC, Dell resell EMC's entry-level and midrange storage arrays, and data domain deduplication devices. The partnership lasted for more than a decade, bringing billions of dollars in revenue to both parties.
For EMC, the agreement brings in more than 10% of EMC's total revenue. According to relevant research data, the revenue generated by the two partnerships is approximately 25% of Dell's total storage revenue. However, in the context of subsequent developments, Dell is increasingly clear that it has a signal - it has its own storage product line.
In November 2007, Dell acquired EqualLogic, a storage solution provider, for US$1.4 billion, which at that time created a phased new high for the Dell acquisition.
According to data from Dell's related financial reports, after the completion of the acquisition of EqualLogic, the annual revenue of its products rose from the original 100 million US dollars to the current 800 million US dollars.
Today, in the face of Dell's repurchase of 3PAR, the industry believes that Michael Dell's ambition is not only to share in the SME market, but also in the high-end market with EMC, Hitachi, IBM and other storage giants.
Dell has been saying that the new acquisition will not affect the cooperative relationship with EMC. Brad Anderson, the company’s vice president, said, “EMC is a very important partner for us and our plan will not change any of the original cooperation. Dell is a company that likes to choose, and now we have provided a choice. He pointed out that Dell has never resold EMC's high-end series. After Dell acquires 3PAR, there will be no overlap or competition between the two companies in this product area.
However, the industry does not believe that Dell and EMC will be long-term friendly. The well-known technology blogger Gigaom wrote that it is only a matter of time before Dell and its partners break apart.
In fact, the competition between 3PAR and EMC was already arrogant before it was acquired by Dell. Previously, 3PAR had named a memory E-MC256, which made EMC unhappy and eventually 3PAR renamed the product XP256.
Charles King pointed out that "From a technology or business perspective, Dell and 3PAR's transaction has a significant meaning for both parties. With Dell's sales channels and high cash flow as a support, 3PAR can best explore its potential. â€
With Dell's layout storage market, the industry has pointed out that since the competition in the storage market will be more intense, the giants will each move: IBM will continue to sell integrated storage solutions to customers, EMC will not sit in the way of partners erode Its market share, and HP will be the most vulnerable, because so far, its high-end storage products still need Hitachi to provide hardware and some software.
Diversified operations Looking at Dell's entire game, expanding storage product lines may be just one step.
Mark Pitts, an analyst at Enterprise Strategy Group, believes that Dell's acquisition of 3PAR has little to do with storage products. What Dell wants to do is to become a one-stop solution provider like HP and IBM to enter the enterprise market.
It is worth noting that when Dell executives responded to the purchase of 3PAR, they said that the acquisition is an opportunity to enter the high-profit corporate market. Sensitive observers pointed out that this may be the first time Dell executives use the term "high profit." For a long time, Dell's financial report has been relying on low-profit PC business.
HP's total revenue for fiscal 2009 was $116 billion, compared to Dell's $53 billion in revenue for the same period, which is less than half of HP's. Among them, PC business still accounted for more than half of Dell's revenue, and this part of HP's revenue is only one-third. The US "Weekly News" once reported that excessive reliance on PCs has pushed Dell into a meager position, and its operating profit margin has only remained at around 5%.
However, Michael Dell has been committed to promoting the diversification of the company since he took the helm again in 2007.
In June 2009, Dell dug up David Johnson, IBM’s former M&A executive, to make up for Dell’s lack of acquisition experience. Following the acquisition of EualLogic for $1.4 billion in 2007, in September 2009, the company again acquired Perot Systems for $3.9 billion.
At the time, analyst U.S. bank Maynard Udov predicted in a report before the acquisition that Dell’s hardware business will continue to be under competitive pressure and its products will inevitably become daily necessities. In this case, service business can help them improve profitability. "We believe that service should become the focus of Dell." Wu said.
Subsequently, Dell's actions are still frequent. In July, Dell announced the acquisition of data center software company Scalent; shortly afterwards reached an agreement with Juniper Networks on data center security; on August 17, Dell signed a multi-year strategic agreement with original equipment manufacturer Aruba. The sale of its wireless products has expanded Dell's network product portfolio.
In this regard, the industry also has the view that Dell's next goal or will be the network equipment company. Currently, there is a lack of network equipment connected to servers and storage in the Dell product line. Broadcom may be its potential acquisition target. How long will it take for Dell to achieve the transformation of its business architecture? This is not known. But Bernstein analyst Tony Sarkozychi pointed out in a research report that IBM also made a ten-year acquisition to make a fundamental change in its revenue structure. He pointed out that since 2002, IBM has completed 78 acquisitions and acquired 75 software and service companies.
In the current "one-stop" model, competition in the corporate market has become more intense. On August 17, Hewlett-Packard announced the acquisition of Fortune Software, a network security vendor. After the acquisition, HP will provide a complete set of industry-leading network security solutions to help companies reduce business risks and prevent malware attacks. During the same period, IBM, Cisco, Oracle and other companies are also waiting to find the next "prey" to expand their right to speak in this market.
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