Dell in the clouds as it wins battle with HP for $1.5bn 3Par

COMPUTER firm Dell said yesterday that data-storage maker 3Par has accepted its raised buyout bid of $1.52 billion (£980 million), after it topped an offer from rival Hewlett-Packard.

HP and Dell, among the world's largest personal computer makers, are looking at 3Par as a way to build up their "cloud computing" businesses, which involve delivering software, data storage and other services to customers over the internet. The companies want 3Par to help keep data-storage costs down because the company has technology that doles out storage space on the fly.

Dell's new offer is $24.30 a share in cash, up from its $18-per-share offer, or about $1.13 billion, on 16 August. Rival HP had countered with an offer of about $1.5bn on Monday, or about $24 per share.

The back-and-forth bidding for such an obscure company underscores how serious Dell and HP are about finding more profitable businesses than selling computers. The companies that made personal computers affordable and ubiquitous must now draw new buyers by offering more sophisticated PCs with ever-lower prices. The cost of parts, meanwhile, has increased this year, putting even more of a squeeze on profits.

Cloud computing holds the promise of richer profits for technology providers because many companies aren't buying their own computer servers for certain tasks any more. Instead, they're paying to have software they would have stored on those machines delivered to them over the internet.

Dell, HP and others are trying to take advantage of the trend by offering those kinds of cloud-computing services directly on a subscription basis, along with the equipment and software for customers to build their own cloud systems.

One of the reasons cloud computing is attractive is that such systems are designed to be shared by multiple customers, which spreads out the cost of operating expensive equipment.