The torrid, two-week stock-price run of Compellent Technologies of Eden Prairie cooled this week, but speculation persists that the data-storage developer remains a target for a takeover by one of the nation's computer giants.
Compellent hit a four-month high of $17.17 a share Friday before slipping to a $15.27 close on Tuesday.
Huge Hewlett-Packard and Dell already are in the hunt for 3Par, a data-storage company based in Fremont, Calif., that is one of Compellent's competitors.
The big computer manufacturers want to increase their product depth and market reach through acquisition of a smaller data-storage outfit that makes a faster, cheaper product.
Compellent has been mum about any pending deals. However, the company is expected to announce Wednesday that it has lured a big data-storage client from HP -- Heineken, the huge brewer that makes Heineken, Amstel, Fosters and other beer in 150 countries.
"From Day One, we built this company to grow as an independent storage provider and we truly believe Compellent has the potential to become the next billion-dollar storage company selling through our [distribution-channel] partners," CEO Phil Soran said through a spokesman.
Soran said the bidding war for 3Par and the speculation about Compellent is "validation of the increasing importance of efficient data storage for virtualization and 'cloud computing' environments."
Traditional IT vendors, he added, are not offering the storage innovations customers need. "When their data storage needs outgrow a particular storage solution, end users will be forced to 'rip and replace' to scale up," Soran said.
3Par and Compellent are nimble because of their "built-in storage intelligence," which the huge technology firms have been unable to duplicate with their off-the-shelf storage products. And that also makes 3Par and Compellent acquisition targets.
Soran, 53, a veteran of IBM and an entrepreneur who started Xiotech nearly 20 years ago, declined to comment about the bidding war. However, Soran also knows that he could not look askance at a killer offer to shareholders.
Compellent is projected by analysts to be profitable this year on about $150 million in revenue.
The stock traded as high as $24 last January before dropping to $12 per share as Compellent's quarter-over-quarter revenue growth slowed from a 25 percent-plus pace.
3Par's price called 'insane'
Steve Cheney, analyst and writer at Techcrunch.com, predicts that HP eventually will win 3Par, which has been trading at an "insane" $20 premium to its price of $10 per share before the August bidding war started.
3Par's "thin provisioning" technology enables disk space to be allocated as needed, greatly reducing IT management costs.
"Think of it as storage on a just-enough and just-in-time basis," Cheney wrote a few days ago. "Not surprisingly large storage vendors have been slow to adopt technologies like 3Par's for a simple reason: making storage more efficient ultimately means selling less gear and is essentially akin to committing commercial suicide."
So, the big technology companies now look to buy nimble storage-manage outfits. Cheney ranks Compellent and Pillar Data, another Compellent competitor, behind 3Par for their technology, but also likely as acquisition prospects.
"Compellent has been the forerunner in innovative automated information life-cycle management," said Patrick Mulvee, a vice president with California-based Sidepath Inc., which uses Compellent storage solutions in the technology systems it sells customers. "We are excited to see that larger storage vendors are seeing tremendous value with this technology capability as demonstrated by Dell's announcement of the intent to acquire 3Par. With our experience in offering a storage-centric solution like Compellent, we have been able to provide a system that's nimble, integrated with the leading technology platforms, and complete with innovative features, thus providing significant business value to our customers."
Minnesota, which largely missed the PC- and Internet-company revolutions, has done better in the storage-technology business, including Eden Prairie-based Compellent, Xiotech and Seagate Technology, which has a big operation in Bloomington.
It would be great if Compellent, which boasts 410 employees after only a few short years, could prosper and grow as an independent, locally based company. However, in a consolidating environment driven by deep-pocket technology titans, Compellent may not be able to drive its own destiny.
Neal St. Anthony • 612-673-7144 • nstanthony@startribune.com
