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.

HP cuts 9,000 jobs in data center consolidation effort

June 1, 2010 -- HP is cutting 9,000 jobs and taking a charge of $1 billion as it begins refitting its data centers on the HP Converged Infrastructure Architecture.

Described by HP as an "initiative is designed to enhance the client experience and better position Enterprise Services for growth," the company announced plans to consolidate its Enterprise Services' commercial data centers, management platforms, networks, tools and applications to "create a more scalable, modernized and automated IT infrastructure that will better serve its clients' needs (see "HP strikes back with Converged Infrastructure Architecture")."

The unfortunate side effect will be the elimination of approximately 9,000 positions over the next few years.

Tom Iannotti, senior vice president and general manager for HP Enterprise Services, said "Over the past 20 months, we focused on integrating EDS and improving profitability. Now that the integration is largely complete, we have identified significant opportunities to grow and scale the business. These next-generation services will enable our clients to benefit from the combined technology and services leadership that only HP offers."

HP bought EDS for $13.9 billion in 2008 and rebranded it HP Enterprise Services in September of last year.

To fund the consolidation HP will take a charge of approximately $1 billion over a multiyear period that will be included in its GAAP financial results. HP expects that, once completed, the transformation will generate annualized gross savings of approximately $1 billion and net savings after reinvestment in a range between $500 million and $700 million.

HP's most recent earnings report was strong, as it posted net earnings of $2.2 billion for fiscal Q2 (up 28% from the prior year) with $4.5 billion in revenue in the Enterprise Storage and Server segment. However, software was down 1% from '09 and services only grew 2% to $8.7 billion. See Dave Simpson's blog: "Solid storage growth in HP's Q2 report."

HP will reportedly create a few thousand new positions in support of the consolidation effort.

There may be a silver lining for any storage pros facing unemployment. Sister site Enterprise Storage Forum reports that the job market for storage networking pros is on the grow. Brocade, CommVault, EMC, NetApp, Oracle and VMware all appear to be hiring (see "NetApp Leads Rebound in Storage Networking Jobs").

Survey says…

It’s that time of year again. Major product announcements are scarce as we head into the holiday season, but the storage vendors are attempting to fill the December news void with a series of surveys that gauge the challenges facing end users in 2009.

How do you stack up against your peers when it comes to storage planning for next year?

Enterprise users

Virtual tape library (VTL) and de-duplication vendor SEPATON recently conducted a survey of IT pros in U.S.-based corporations to get a feel for what challenges they will face around data protection, business objectives and technology requirements for enterprise data centers in 2009.

Of the 145 respondents – all from enterprise companies with at least 1,000 employees and a minimum of 50TB of primary data to protect – 52% say their data protection is insufficient, citing a “lack of budget to keep pace with technology” as the cause.

The research also reveals that backup is still the scourge of many enterprise organizations. Fifty-three percent of respondents need more than 20 hours to complete a full backup, while 37% say they need more than 24 hours to complete a full backup.

According to the SEPATON survey, users are planning to turn to new technologies such as data de-duplication in order to maintain service levels and regulatory compliance.

More than 90% of respondents are either using de-dupe now or want to use it. Of those who do not have de-dupe, 55% are allocating dollars for the technology in 2009.

In addition, a majority of the respondents are using physical tape, but fewer than 50% expect to be using tape one year from now as they increase their use of disk-based technologies like disk-to-disk, VTL appliances, or VTL gateways.

SMBs

Backup pains aren’t just a problem for big IT shops. Small and medium-sized businesses (SMBs) also rate backup as a top priority and an all-around pain in the neck, according to a recent study commissioned by Symantec and conducted by Rubicon Consulting.

Backup ranks as the second-highest computing priority for SMBs, after defense against viruses and other malware, according to responses IT decision-makers at several hundred small businesses (with fewer than 250 employees).

Ninety-two percent of companies poled have deployed some form of data backup technology, yet 50% of those respondents have lost data. Of the companies that lost data, roughly a third have lost sales, 20% have lost customers and 25% say the data loss caused severe disruptions to the company.

Some of the results were disconcerting, given how destructive data loss can be to SMBs. Approximately 25% of SMBs don’t backup their PCs at all and 13% do only informal backups where employees decide the frequency and which files are protected, according to Rubicon. Additionally, about 20% of SMBs conduct no server backups.

CIOs

Hewlett-Packard (HP) recently revealed the results of its own commissioned survey of chief information officers (CIOs) conducted by Hansa |GCR.

The Web survey of 600 technology decision-makers from medium-sized organizations to enterprises across the globe shows that 84% of tech organizations plan to “transform” their data centers in the next 12 months as they look to lower operating costs and reduce business risks through technology.

So-called "data center transformation" projects typically include consolidation, virtualization and business continuity initiatives.

According to the study, 31% of respondents say reducing cost is a top priority for ’09, while 29% plan to enhance data security. The decision-makers also say that technology needs – not business needs – are prompting these investments.

The survey also shows that 95% of organizations are implementing or planning for data center consolidation next year, while 93% and 91% are embarking on business continuity and virtualization projects, respectively.

The research may be sponsored by vendors, but, for the most part, it is in line with a lot of the third party research covered on InfoStor.com. Stay tuned as we track these predictions over the next several months.