Dell, HP Seek Place In Storage, Have Cash To Burn

Another factor is the growth of "cloud" storage services. That sector is growing quickly. 3Par may not have been able to take advantage of that, but as part of a Dell or HP, it can. "There's a lot of synergy potential there," he said. "Either HP or Dell could double 3Par's revenue."

The key is the international connections both Dell and HP have. Eighty percent of 3Par's revenue is generated in the United States. The company's growth was quite robust until recently, Moorjani said. It is only in the last year that the stock was in the doldrums.

HP probably needs a company like 3Par, said Hemant Hebbar, senior associate analyst at Wedbush Securities. "HP underinvested in research and development for years," he said. "They have spent consistently less as a percentage of revenue than their peers."

That lack of investment has put HP behind in the enterprise storage business, though it is still an open question whether HP might be better off re-investing rather than acquiring other companies.

For Dell, the 3Par buy doesn't address all of the company's storage needs, Hebbar said. Dell will still need to partner with companies such as EMC.

But the big prize for Dell and HP both is the profit margins on 3Par's business. While 3Par had difficulty growing in the last year or two, its margins were still quite healthy, on the order of 65 percent in the quarter ending March 2010. Moorjani noted Dell and HP both have margins in the 18-20 percent range.

Both Dell and HP also have cash to burn: HP reported $14.7 billion in cash at the end of July, while Dell had $12.44 billion.

3Par's stock has responded well to the news of getting bought: until Aug. 16, when Dell's bid was announced, the 3Par's highest price over the last year was just under $13, in January. Since the bids started coming the stock has pushed its way to $26.03 at the close Thursday.

Dell and 3Par declined to comment on the matter, while HP spokespeople did not return calls.