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August 16, 2010

Dell Set to Buy 3Par to Drive Data Center Growth

Dell is a powerhouse when it comes to data center offerings and it boost this growing sector of the business, the company is set to purchase 3Par Inc. for about $1.15 billion. 

According to a recent Business Week report, Dell (News - Alert) will gain much needed equipment and software products to extend its offerings. As part of this transaction, 3Par investors will receive $18 per share in cash, which is nearly double the stock’s closing price of $9.65 on Aug. 13. Based in Fremont, Calif., 3Par makes hardware and software to reducing information storage requirements. 

Already a formidable player in the market, Dell is hoping to drive a more powerful opposition to companies like Hewlett-Packard (News - Alert) Co. and International Business Machines Corp. in the area of more complex computer systems and technology services as they promise to yield higher profits than desktop and laptop PCs, which has been a key focus for Dell for some time. In June, Dell announced its plans to double the size of its data center and technology services business through planned acquisitions. 

In July, the company agreed to buy Ocarina, a closely held storage company, for an undisclosed price. At the same time, Dell also agreed to acquire server-computer Scalent Systems.3Par has not had the best stock performance over the last year as it experienced a drop of 19 percent. Dell, on the other hand, is driving an increase with its announcement, rising 2 cents on Aug. 13.

In other Dell news, the company announced it completed its annual shareholders' meeting with the election of all director candidates and shareholder approval of an amendment of certificate of incorporation to eliminate supermajority vote provisions.Dell also announced it is now shipping its Inspiron M101z ultra-portable laptop. The company said that it new laptop, which weighs less than four pounds, can easily fit into a handbag or backpack but still delivers enough performance to cope with everyday tasks or deliver 'impressive' playback of streaming movies and HD videos.

TMCnet reported Dell could be at risk after recently unsealed court documents show the company’s reaction to failing computers due to faulty components. The New York Times reported this week that documents recently unsealed in a three-year-old lawsuit against Dell show that the company’s employees were aware that the computers were likely to break.
Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan’s articles, please visit her columnist page.

Edited by Erin Harrison
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