HP, Dell and 3Par: The Art of the Hustle
Rivals Dell and HP have gotten themselves into a cutthroat bidding match over 3Par, and the winner could walk away with a big leg up in the business of large-scale data storage. But it'll come at a price: So far, Dell's and HP's enormous bids have more than tripled the value of 3Par stock. Meanwhile, Dell serves a moldy Cupcake, Gmail installs a phone booth and NAB pushes FM in DC.
Last week, Dell cranked its wallet wide open and announced its intention to buy up a company called "3Par" for US$1.15 billion. Putting 3Par under the Dell umbrella would buff up the high-end storage and large-scale backup side of its business and give companies like IBM and HP a new competitor to worry about.
The purchase looked similar to a deal it cut in 2008, when it forked over $1.4 billion for EqualLogic, as well as its Ocarina Networks buy just last month, though the terms of that one were left undisclosed. Adding 3Par to the pile would make Dell ready to sell high-end, high-margin storage equipment not just to SMBs but to huge enterprises as well.
But that news drove HP into a frenzy. World-class enterprise storage is a big goal for that company, and if the 3Par deal goes through, it'll have to fight off both Dell and IBM for the top position. So it went ahead and trumped Dell's bid, offering $1.6 billion.
What's really strange about this is that right now, HP has no proper CEO. It has an interim chief who's not even in the running for the permanent position. So even though HP has a plausible legitimate reason for going after 3Par, there's been some some speculation about what other factors may have played a part in the decision. Maybe it was mulling a 3Par buy anyway, and Dell's bid gave it a way to kick up some drama and get itself out there with something that had nothing to do with Mark Hurd for once. Or maybe it's worth $1.6 billion to HP simply to keep 3Par away from Dell.
Or perhaps HP did it to prove that it doesn't need a CEO to act like a fully functional corporation that can grab opportunities when they come up. It doesn't need a head to survive. Like a roach.
Whatever the reason, Dell wasn't about to let 3Par go so easily. It wasted no time in putting together yet another offer, though it didn't go much higher than HP. That bid also rounded to about $1.6 billion, but it totaled up to slightly more because Dell slapped on an extra 30 cents per share. Dell had built a matching bids provision into its initial offer, so it was able to get away with the "Price Is Right" Showcase Showdown tactics.
But that just made HP even angrier, so it made another counter-bid. Hours later, Dell countered that counter bid, matching HP's $1.8 billion offer. Minutes later, HP slapped $2 billion onto the table. Last I heard, the wheeling and dealing was on pause while everyone took a deep breath, but given the pace of developments, the two may still be trying to edge each other out.
Right now, 3Par must be loving it -- it's stock went from $9.65 before the first Dell bid to $30 as of HP's latest valuation. And it still gets to wait and see whether one or the other will try one more grab at it. In a way, 3Par's competitors might also like what's going on. Whoever loses may look to companies like Compellent Fluid Data and Isilon as a consolation buy. They probably won't be able to start this kind of a bidding war all over again, but they could probably name a starting price that's a bit higher than they could two weeks ago.
Listen to the podcast (13:55 minutes).
The Aero's Strange Flight Plan
Seems like a new smartphone comes out every week, and the spec sheets are starting to blend together in my mind ... 1 GHz ... HD video ... 32 GB ... bah! It's like the only way to stand out right now is to give the phone either a cute name or some kind of bolt-on gimmick like a retractable taser.
But with its new Aero Android phone, Dell has managed to get some attention, for all the wrong reasons.
At first blush, the Aero looks like a decent, mellow little phone, living in the affordable housing neighborhood of AT&T's lineup. Five megapixel camera, WiFi, GPS, Android, kind of a spindly little processor, but it's 100 bucks so what the hey. That's nice, Dell, good luck to you.
Then you do a spit-take on the operating system: It's shipping with Android 1.5, a version that's over a year old. Dell says it's made enhancements to the user interface, but makeup can only do so much. In phone OS years, 16 months is well past retirement age.
And unless you're willing to roll up your sleeves and do some hacking, it's not like you can pick one up and upgrade it yourself the minute you get it home. In the world of Android, even if a new version is available for some phones, it's not necessarily available for others. It's up to the manufacturer.
It's unclear when or if Dell will ever opt to bump Aero into modern times with Android 2.2. Usually when an Android phone comes to market with yesterday's OS, the manufacturer is quick to point out that another desert platter is on the way, so sit tight. Dell at least mumbled something about Froyo when its Streak showed up with a box of day-old Donuts earlier this summer. But with Aero, nothing.
So Dell's getting ripped up in the Geekosphere over this one, but it makes me wonder whether it even matters. When you're choosing a phone -- you personally -- you might care a lot about what OS it runs, but there's a great big world out there, and it's full of people who care nothing about the things you hold dear.
Maybe there are enough people out there who just want a phone that'll get email and do Google searches and give them directions to the mall, and if it has the same logo on it as the laptop at home, well that's just fine with them. Maybe there are just enough of those people out there to make a phone like Aero worth the trouble. Maybe.
iSpy With My Little iPhone
The feeling of having lost your phone can be a little more upsetting than just the thought about how much it's going to cost to replace it. If you keep a lot of personal stuff on there, and you didn't spring for some add-on service that lets you do a remote wipe, it's kind of like knowing someone broke into your house and started poking around.
So on the face of it, this patent that Apple was apparently granted recently sounds like it could serve as a great iPhone security feature. The patent describes ways in which the phone can identify the user and brick itself if it decides its master is not the one at the controls. It could do this by taking a voice print, taking a photo, or even through biometric data like a heartbeat. It could also give the owner clues about where it is by secretly snapping photos and beaming them up to the mothership.
Presumably this kind of security feature would be opt-in and under the owner's explicit control. You don't want your iPhone going into a coma just because you let your friend borrow it for a minute. And surely such technology would never be used to invade anyone's privacy, right?
Or is that presuming too much?
For now it's just a patent, and Apple patents lots of stuff it never uses. But even as a mere concept, this technology has privacy groups like the Electronic Frontier Foundation positively skeezed out.
For one thing, the document specifically classifies jailbreaking as an unauthorized use of the device. Even though the Library of Congress has said jailbreaking a phone is legal, there's concern that this self-monitoring technology could be used to retaliate against users who hack their own phones.
Beyond that, the EFF says there are still troubling implications here even if you play by Apple's rules and never jailbreak an iPhone.
Using the technology in this patent would allow devices to secretly collect, store and potentially use sensitive biometric data about users, the EFF says, and that's way more than what's needed to guard against loss or theft. Between that, the ability to secretly snap photos, monitor memory, check in on what Web sites the browser was looking at and other functions, the potential for abuse is just way too high, according to the group. Even if Apple were to promise none of those features would be activated unless the user reported a loss or theft, that would sound a whole lot like what Lower Merion school officials said about those laptops they gave to students.
Room for One More?
If you've ever taken a smartphone apart, either on purpose or by accident, you may have noticed how cozy things are inside. Engineers are able to cram an amazing array of cutting-edge guts into these things -- lithium batteries, WiFi chips, gyroscopes, digital cameras, everything. But now the NAB, the National Association of Broadcasters, wants cellphone makers to squeeze one more item in there, and compared to all the high-tech crap you find in a phone these days, it sounds straight-up old-timey: They want your phone to have an FM radio.
This wouldn't be voluntary, either. NAB wants it mandated by Congress. So even if both buyer and seller don't care a damn about FM radio, they'd have to build it and you'd have to buy it if you wanted a cellphone.
The proposal is the product of a twisted love/hate rectangle between radio stations, cellular carriers, device makers and record companies. Bolting FM radios to every phone sold would increase traditional radio listenership, which is kind of hurting now that there's a million ways to get music on the go without using the FM band at all. Or perhaps it wouldn't do much to increase actual listenership; more like it would let radio ad sellers pump the numbers they're giving their buyers.
So radio stations get a payout. Then Part B kicks in: The radio stations have to start paying record companies to play their music. The NAB's also proposed that U.S. broadcasters pony up $100 million per year to the labels for licensing fees. This is something the radio stations have fought tooth and nail for decades, but perhaps they don't think it's so bad if the other part of the plan means everyone in America with a cellphone can be counted as someone who's never more than five feet away from a radio.
The record labels don't seem to have much of a problem with this arrangement -- can you blame them?
But the NAB would call me a cynical little troll-person for saying all that. It's not about money. NAB says the whole plan is all about safety. Your safety. What if you were caught in an earthquake or a monsoon or a locust attack? Who would you turn to for information if you couldn't tune in to the wacky tacky morning crew? Who?
In the other corner of the ring are carriers and device makers. The people who design phones really don't want yet another federal regulation hanging around their necks, and carriers see FM as a potential threat to the revenue they get off extra services and application sales.
And right in the middle is you, the consumer. If the proposal becomes law, you get a phone that may be a bit larger than it otherwise would have been in order to accommodate a feature you may or may not ever have any intention of using.
A Different Kind of Gphone
Google is wading a little deeper into the phone business with a new feature it's built onto Gmail. It's different from Google Voice. With Google Voice, you have to request and be assigned a whole different phone number -- it's kind of an involved process. But with the new Gmail feature, all you need is a Gmail account and a plug-in that you download directly from Google.
The feature allows you to make outbound phone calls directly from the Gmail interface on your computer. A little keypad pops up, you mouse in the number you want to call, and you're connected. Your computer's mic and speakers do the handset's job, and there's no fee if you're calling the U.S. or Canada.
And it can be made compatible with Google Voice if you happen to use that service too. For instance, if you have Google Voice, you can receive calls through Gmail, not just make them.
So what's this going to do for Google? Well, it might push it just a little farther into the unified communications space, and it could put it up against Skype and Microsoft's Sharepoint. And while it doesn't offer nearly as many features as Google Voice, it is a lot more accessible -- you don't have to sign up for a whole different phone number if you want to use it.
When it comes to watching movies online, the concept of renting a download can be a pretty good option. You only pay for what you watch, it's usually about the same price as renting an actual DVD, you don't have to deal with disc scratches, the image quality is good, and you're not shackled to a Web-connected TV -- you can load it into a media player and travel with it. And they're housebroken -- when they expire, they self-delete.
Renting movies is something Apple's iTunes has down pat, but wouldn't it be even better to be able to rent TV shows? Most of the time they're more, I don't know, disposable than movies, and if iTunes was to charge half of what it does for the TV shows it lets you download for keeps, it may be an even better option than having a cable subscription, provided you're more a quality-not-quantity person when it comes to television.
There's word Apple is trying to nail down a system just like that, and the rumor comes around just after talk that Cupertino's also working on a top-to-bottom revision of its Apple TV hardware, complete with name-change to "iTV."
But even though Apple has a track record for bending entire industries to its will, it always meets a lot of resistance, and TV Land is no different. It's reportedly in talks with several large networks, though they may not all be going well. Disney and Apple are special friends, so ABC may be easy to corral. NBC is a special enemy. Fox and CBS? Eh, I don't know. It's got to be a messy process, tying up new deals in a big knotted tangle of licensing agreements that's already pretty hideous.
And if Apple wants to make itself a real alternative to cable, it'll also have to tie up deals with dozens of production companies that make actual cable shows, not just the stuff you can get over the air for free. There's also competition from what Google TV may become and what Hulu has already become with the premium service it just got started with.
Plus, satellite and cable providers won't like this at all. Remember that cable companies have their hands on a lot of the tubes that connect iTunes to its customers in the first place, and network neutrality is still not written in stone.
But in some ways, this is probably similar to what Apple faced with record companies years ago, and things eventually turned out pretty well for them.
For Apple, I mean.