Dell Goes All-In for 3Par

There's little doubt that storage is a strategic business. With the growth in corporate data -- as well as consumer offerings like video and social networks -- the market should experience long-term growth.

In fact, several years ago Dell spent $1.4 billion for another storage provider, EqualLogic. It was a smart deal. But why not be even stronger in the space?

This would certainly be the case with the acquisition of 3Par. In fact, the company will provide an footprint in the high-end segment of the storage market. More importantly, this is an area where there are few operators that have the scale of 3Par.

Yet the fact remains that the current valuation for 3Par is at nosebleed levels, coming to over eight times revenues. And in light of Dell's shrunken market cap -- which is at about $23 billion -- the deal is certainly a risk for shareholders. Should the company really be getting into a bidding war with HP, which has the resources to make a superior bid?

The problem is that Dell needs to do something to get growth back on track. Ultimately, this means getting aggressive with acquisitions.

Tom Taulli is also the author of several books, including the Complete M&A Handbook and also develops iPhone apps for finance.