Deals

Dell salvages its 3Par fiasco, picks up cloud storage provider Compellent for $820M

Dell has picked up cloud storage provider Compellent for $820 million after losing out on its bid for storage provider 3Par a few months ago to Hewlett-Packard.

Compellent, like 3Par, is a provider of technology and software for cloud-based storage. It allows users to store data on both public and private cloud servers more efficiently and cut some management costs.

It’s an increasingly important set of technology as many companies move to have their employees use virtualized versions of software that are run on remote servers. That brings hardware costs down by letting companies just purchase high-powered servers — or computing power from public cloud providers like Amazon — instead of multiple individual computers.

Not to be outdone by HP, Dell took what it could as a consolation prize after 3Par sparked a massive bidding war between the two companies. Dell was willing to offer up to $2 billion for the storage provider, and HP countered with a successful $2.4 billion offer. The very public bidding war is another indicator of how important this kind of technology has become.

Most of Dell’s business is in providing companies with private cloud servers. It sells large servers that are run and maintained in-house and are directly connected to networked computers rather than using the Internet. Usually private cloud servers are faster, and a lot of people argue that they are more secure than public cloud services. Dell has already said that it doesn’t expect public cloud services to overtake private cloud usage for those exact reasons.

But with private cloud servers, each company has to bear the costs of keeping those servers up and running. That isn’t the case with public cloud servers, where companies like Amazon and Rackspace are responsible for keeping them running. So adding ways to reduce the IT headaches that private cloud servers bring seems to be another way Dell is hoping to keep the private cloud popular.

Dell’s server business is already booming. If you split Dell’s Data Center Solutions off from the main company, it would count as the third-largest distributor of x86 architecture servers, or those with chips from Intel and AMD. Dell’s top 20 customers — including Microsoft and cloud video game company OnLive — regularly purchase tens of thousands of server nodes from the company.

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