HP’s bid for 3PAR not its first

After a bit of tap dancing, HP revealed that today’s $1.6 billion blockbuster bid for 3PAR was not its first.

HP published its offer letter today in which executive vice president, chief strategy and technology officer Shane Robinson wrote:

“We propose to increase our offer to acquire all of 3PAR outstanding common stock to $24.00 per share in cash. This offer represents a 33.3% premium to Dell’s offer price and is a “Superior Proposal” as defined in your merger agreement with Dell.”

In a conference call with media and analysts, Dave Donatelli, executive vice president and general manager of HP’s Enterprise Server, Networking and Storage Business, said HP had “done due diligence on this deal prior to anything you’ve seen announced publicly” and “had multiple meetings with [3PAR’s] senior management.”

Finally, when asked whether HP had an outstanding offer on the table when Dell made its move for 3PAR, HP’s Steve Fieler, vice president, investor relations, admitted that there was “another offer on the table.”

Donatelli also said he expects HP’s relationship with Hitachi would continue. “There is always going to be overlap in storage solutions. That’s been happening for the past 20 years and I don’t have any concerns about it. I actually view that as a positive because it makes sure you have a seamless offering and that you don’t have any competitive gaps.”

He also said HP “looks forward to the response” from Dell.

Dell declined to comment on HP’s counteroffer.

For the full story on the HP-3PAR-Dell triangle, see “HP, Dell in Bidding War for 3PAR.”

You can hear a replay of the conference call/webcast on HP’s website.

Like Cisco, Brocade Falls Short

Cisco’s Q4 sales fell short last week and Brocade followed suit with its Q3 earnings, missing analyst forecasts and lowering its revenue expectations for its fiscal year. But why?

Some industry insiders think customers are biding their time as they watch how the whole converged networking/unified fabric push plays out.

In a statement regarding Brocade’s (NASDAQ: BRCD) earnings, CEO Michael Klayko said, “Q3 was another solid quarter for Brocade in which we achieved better-than-expected results from our storage area networking business and continued to make progress in our Ethernet go-to-market initiatives. As we look to Q4, we expect a strong finish to our fiscal 2010. Despite operating in a challenging global economy with variable IT spending patterns, we are confident that our sales and marketing strategies as well as our product portfolio are aligned well with customer imperatives.”

Cisco’s (NASDAQ: CSCO) CEO John Chambers also cited uncertainty in the economy as well asmixed signals in the market and customer expectations as the reason for Cisco’s Q4 sales miss. However, Chambers said he’s confident that Cisco will succeed by continuing to “aggressively move into new areas where the network is becoming the platform.”

Brocade’s Numbers:

- Q3 revenue was $504 million, increasing approximately 1% sequentially and 2% year-over-year.

- Q3 GAAP EPS (diluted) was $0.05, sequentially level, and increasing from a loss in Q3 2009.

- Q3 non-GAAP EPS (diluted) was $0.13, sequentially level, and increasing 8% year-over-year.

- Q3 non-GAAP operating margin was 17.3% versus 20.5% in Q2 2010 and 20.3% in Q3 2009.

- Q3 effective GAAP tax rate was (220)%; non-GAAP effective tax rate was 0.2%.

- Q3 Adj. EBITDA was $102 million, down from $116 million in Q2 2010 and $119 million in Q3 2009.

- Q3 total Storage Area Networking (SAN) port shipments were approximately 1.0 million.

For the full Q3 financial results, including prepared comments from Brocade executives, go to http://www.brcd.com.

For more earnings news, check out Dave Simpson’s blog on NetApp’s Q1 bonanza.

The Battle for OpenSolaris

All's been quiet on the OpenSolaris front since Oracle's acquisition of Sun, but there's a reason for that. The company has been focused on getting Solaris 11 out the door, according to John Fowler, Oracle's executive vice president of systems.

Fowler led a webcast earlier this week in which he outlined Oracle's Systems Strategy roadmap, including its plans for tape, ZFS, and the continued evolution of the Exadata database machine. It was nothing we haven't heard before. What was interesting, however, was the live chat session that ran alongside Oracle's webcast.

Tweet-chants like "Oracle needs to communicate with the OpenSolaris community!" came fast and furious as Fowler detailed Oracle's roadmap, including next year's release of Solaris 11, which is said to include a number of technologies developed by the OpenSolaris community.

Fowler admitted to sister site InternetNews.com that Oracle has "been a little quiet on the open source front. It's not that we're not investing in Solaris, we're just investing to make sure that we have all the major components for the new release."

Fearing the worst for OpenSolaris, a new open source community has formed to provide alternatives to the closed components of OpenSolaris. The community, dubbed the Illumos Project and spearheaded by Nexenta Systems' new senior director of engineering Garret D'Amore, a former Sun engineer and a leading contributor to the OpenSolaris operating system for the past five years, claims that the core concern of the OpenSolaris community is that critical components of the platform aren't open at all.

However, D'Amore maintained Illumos is not an Oracle competitor. "We would love to have Oracle and its employees as peers. They can't own it, but they can participate. We want the technology to be usable by Oracle and taken back upstream," he said. "We want to create the insurance that the industry desperately needs in case the tap gets shut off."

There's a subplot to this drama. The underpinnings of Nexenta Systems' NexentaStor software are based on the OpenSolaris ZFS file system, which is at the center of a years-long legal battle between Oracle-Sun and NetApp.

NetApp fired another salvo recently by threatening to take legal action against Coraid, a storage startup that was about to begin selling NAS products based on Nexenta's technology. The NetApp legal threat stopped Coraid in its tracks.

Illumos has its own plans for ZFS. "At the moment, the code is identical. In the future, there may be additional enhancements and innovations in Illumos beyond what Oracle has. We have some concrete ideas we are exploring, but we're not quite ready to provide concrete details yet," D'Amore said. "We want to be a self-hosting Solaris derivative without any corporate dependencies. In my ideal world, anybody could use this code for whatever they want."

It seems to me that the concerns of the Illumos folks may be valid. In recent months, Oracle has forced Lustre users to buy Oracle hardware if they want to continue to be supported, as well as shut down servers Sun Microsystems was contributing to the build farm for PostgreSQL, the open source database software.