Dell Inc., beaten by Hewlett-Packard Co. in an 18-day bidding war for data-storage provider 3Par Inc., is likely to pursue other targets that would help it vie with market leaders including EMC Corp.
"We do plan to continue to look to grow organically, but also take a look at strategic acquisitions," David Frink, a Dell spokesman, said. He declined to discuss possible targets.
HP clinched its purchase Sept. 2 with an agreement to pay $33 a share, or $2.35 billion. Dell, with $12 billion in cash on its balance sheet and a $72 million breakup fee from 3Par, is scouting for companies that will help it move into higher-margin products, including storage, technology services, networking and software, the company has said.
3Par would have helped Dell compete more effectively with EMC, International Business Machines Corp. and Hitachi Ltd. in the $19 billion market for external disk drives, said Roger Cox, an analyst at Gartner Inc. in San Jose, California. Runners-up include Pillar Data Systems Ltd., Xiotech Corp. and Compellent Technologies Inc., Cox said.
Closely held Pillar, which makes storage systems for databases and files, has revenue of more than $50 million a year and is about 85 percent-owned by Larry Ellison, Oracle Corp.'s chief executive officer, said Pillar CEO Mike Workman.
Eoin Treacy's view his blog
from the CEO at Pillar Data Systems dated August 26th may also be of interest
with regard to bid for 3PAR. I suspect we are all going to hear a lot more about
"cloud computing" in the next few years with increasing numbers of
large companies making inroads into what is seen as the future of data storage,
security, access and availability. As I understand, the basic concept revolves
around having the equivalent of space on a hard drive in a data centre rather
on your desktop or laptop so that you can access your files just about anywhere.
by David Yen at Juniper Networks, while sales oriented, offers some additional
insight into the direction data storage technology is taking. Here is a section:
Tying all the resources together in your data center is the most efficient, dynamic way to help make your business run better. And in the end, you can deliver a better experience to the end user at a lower cost - to improve the experience and economics of the network while avoiding tradeoffs of legacy networks. Whether you use out-of-the-box apps or create your own custom apps, Junos Space lets you speed deployment, reduce errors and lower costs. It delivers flexibility, unprecedented network visibility, reduced recovery time and the ease of automation to help you reduce data center networking costs and improve user experience. And Junos Space will be the platform used to automate and support Project Stratus when it's available.
I performed a search of Nasdaq-100 companies on March 5th looking at 20-year charts in an effort to find shares that were close to completing long-term bases. In retrospect, while technology was a major theme in the results it is now becoming clear that there was also a high degree of commonality in the results with Citrix Systems, Check Point Software Technologies, Cognizant Technology Solutions, Juniper Networks and Oracle all sharing a connection to next generation data storage.
Citrix Systems (20yr, 5yr) jumped in late July on positive earnings and has held the advance to date. While somewhat overextended in the short-term, a sustained move below $50 would be required to question medium-term upside potential.
Check Point Software Technologies (20yr, 5yr) found support at the upper side of the long-term base from May and has since rallied back to test the recovery highs. A decline below $28, sustained for more than a week or two would be required to question medium-term uptrend consistency.
Cognizant Technology Solutions (20yr, 5yr) remains in a consistent medium-term uptrend. It paused in the region of 2006 high, allowing the 200-day MA to catch up and reasserted the uptrend in July. It is now somewhat overextended in the short-term but a sustained move below $56 would be required to begin to question upside potential.
Juniper Networks (20yr, 5yr) remains within its long-term base and has been trading mostly above $25 for a year. It has plotted a progression of higher reaction lows since July and these would need to be taken out, with a move below $25, to question potential for continued higher to lateral ranging.
Oracle (20yr, 5yr) found support in the region of 2007/08 highs from early May and continues to range mostly above $22. It rallied from that area again last week and some additional follow through would confirm the return of demand in this area beyond a short-term bounce.
Amazon (20yr, 5yr) has been ranging mostly above its 1999/2000 peak since late last year and has recently rallied to retest its highs. While one might expect the high near $150 to offer an area of resistance, a sustained move below $120 would be required to break the short-term progression of higher reaction lows and question potential for some additional upside.
BMC Software (20yr, 5yr) has been ranging below the 2008 peak near $40 for most of the year. A sustained move above that level would indicate a return to medium-term demand dominance.
In conclusion while a great deal of time has been spent worrying about the future since April, companies such as those listed above have been busy advancing technological solutions that could make all the difference to the USA's technological edge. Their relative strength, particularly over the last month, clearly signals investors are betting these shares offer medium to long-term growth potential.