HP's Victory Could Be A Hollow One

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"To Hurd, getting in a bidding war with Dell would have been counter strategic," Enderle said. "He was excessively frugal. There was a chance they could have responded early, before the bidding war began, but because his department didn't fully support it, HP didn't have a chance to respond in a timely manner. So instead, they responded with a hostile bid. Since Dell committed to the acquisition, they had to drive up the price."

At a certain point Dell decided enough was enough. "We took a measured approach throughout the process and have decided to end these discussions," said Dave Johnson, senior vice president, corporate strategy, said in a statement.

The result was what most analysts thought was HP overpaying for 3PAR. 3PAR's stock was at $9.67 at the close on Aug. 13. Before the bidding war and before Dell proposed to acquire it the first time on Aug. 16, 3PAR was trading at $9.67 per share at the end of Aug. 13. At the close Friday it was at $32.89.

HP could also lose the storage company's key talent, according to Enderle, because of HP's traditionally poor record with employee satisfaction. "From our studies, HP has the lowest employee satisfaction in the industry for a financially healthy company. They are already bleeding Palm people. They could bleed 3PAR people as well," Enderle said.

"With 3PAR, HP is getting two things: engineers and intellectual talent. There are probably about 30 or 40 people who are critical assets at 3PAR. Dell and IBM could recruit those people out and leave HP with a shell of a company. HP needs to identify those key assets and secure loyalty. To make this work, HP desperately needs to fix employee loyalty," he added.

In the end, the 3PAR deal could be more of a victory for Dell than for HP. Not only do they get $72 million as part of the break up fee, analysts like Enderle says there is an opportunity for them to cherry pick 3PAR's intellectual talent.

Dell also has other chances to make up for losing out on 3PAR. "Dell was reckless too, but they backed off eventually. That's fine. No one will remember that, but what they do now is important. They need to move and they need to do it fast," Roy said.

This could mean acquiring a storage company similar to 3PAR. Enderle says Pillar Data, which is an independent enterprise SAN and NAS storage provider, would be an appealing option. However, Dell would likely have to compete with Oracle since CEO Larry Ellison is a large investor of Pillar Data. Roy said Brocade is another potential storage company for Dell to acquire.

"Brocade should be their number one priority. If not Brocade, then something similar. They don't need a 3PAR, all they need is products that will improve their margins. It's not like they don't have choices," Roy said.