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HP's 3Par Move Starts Bidding War With Dell

Hewlett-Packard is putting up $1.5 billion in cash to snatch cloud storage shop from Dell.



) --


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launched a bidding war for storage shop 3Par offering to pay $1.5 billion, or a third more than


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original offer.

HP calls the $24 a share, all cash bid "substantially superior to the

Dell transaction" and says "3PAR's

next-generation storage architecture" will add to its product offerings in data storage and network servers, according to a press release Monday.

The move comes as the PC giants feel the squeeze in their core markets and attempt to expand efforts into areas outside the highly competitive computer manufacturing arena.

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HP's headlong dive into a bidding match with Dell caps off a rough month for the top PC maker. Earlier this month, CEO Mark Hurd was immediately ousted as part of an ethics scandal that put the tech giant's overall strategy in question as HP looks to fill the top spot.

The Hurd departure also coincides with a gnawing fear that the tech spending recovery is running out of gas. This concern came courtesy of


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dimmer outlook on sales growth


Shares of Hewlett-Packard are down 13% in the past month amid the Hurd controversy and the ongoing tech swoon.

HP's renewed push into storage marks a significant turn toward so-called cloud computing, where company data is kept on Web servers located outside the office yet accessible on computer networks.

As a sign of leaner times, the cloud approach allows companies to purchase storage services as they need them rather than invest in racks of expensive new network server equipment.

Dell's offer to buy 3Par was lauded as a key element in the company's storage strategy and possibly valuable enough to force Dell to raise its bidding price.

--Written by Scott Moritz in New York.

>>Dell's 3Par Buy Is a Shrewd Move