Hewlett-Packard has offered to buy 3PAR, a vendor of virtualised storage systems, for $1.6bn (£1.03bn) in cash, topping a bid of $1.15bn made by Dell last Monday.
HP made its offer in a letter to 3PAR President and CEO David Scott on Monday morning.
The offer will force 3PAR's board to reconsider its merger agreement with Dell as the HP offer is a "superior proposal," HP's Executive Vice President and Chief Strategy and Technology Officer, Shane Robison, wrote in the letter.
Robison said that HP would be a better fit for 3PAR than would Dell, as both are Silicon Valley companies.
Dell announced last Monday that it was set to buy 3PAR for $1.15bn (£737m), as part of its expansion in the corporate datacentre business. The company said that the acquisition will expand its storage capabilities, especially in virtualisation optimisation.
HP had been looking at 3PAR for some time, and there had been an earlier offering on the table, HP executives said during a conference call Monday. They did not provide additional details.
3PAR's technologies will help HP expand its offerings for building public and private cloud services, said Dave Donatelli, HP's executive vice president and general manager, of enterprise servers, storage and networking, during the call.
In addition, HP has "a unique ability" to bring 3PAR's products to market. "Our reach is something other [companies] simply can't match," he said.
3PAR has gained notice for its "thin provisioning" capabilities, which provide storage resources as needed. Thin provisioning is more efficient than traditional "fat provisioning," which dedicate an excess amount of storage to an application in anticipation of growth, according to advocates.
Donatelli declined to say what HP will do if Dell comes back with a counterproposal. "We think we have a superior offer here and we look forward to the response," he said.
HP expects the deal to conclude later this year.
A Dell spokesman declined comment. 3PAR did not immediately respond to a request for comment.
HP's move did not surprise Forrester Research analyst Andrew Reichman. "HP's portfolio is disjointed and kind of incomplete," he said. "Storage is a hot area with a lot of spending ... Having an end-to-end solution with servers, storage and networking is really critical right now."
3PAR's technology does require some degree of hardware customisation, making HP's decision somewhat surprising, he added. "But I think what this is saying is that they need more in terms of storage and they don't feel they can reach the enterprise with what they have now."
Meanwhile, it's unclear what Dell will do, Reichman said. That company's bid for 3PAR came shortly after moves to buy server provisioning vendor Scalent and storage optimisation provider Ocarina Networks.
Dell should have gone after 3PAR first before pursuing other companies like Ocarina Networks, he said. "Without their own high-end storage platform it's difficult for them to say they are truly relevant in the enterprise."
"I think the stakes are very high for both companies," Reichman added. "There are not that many alternative choices."