Dell is walking away from a bidding contest with rival Hewlett-Packard for data-storage maker 3Par.

Dell said overnight it won't match HP's offer to pay $US33 per share for 3Par, or about $US2.07 billion ($A2.27 billion).

Dell's decision has come barely an hour after 3Par said it had received an offer from Dell of $US32 per share and then the even stronger bid from HP.

In a statement, 3Par said Dell's revised offer contained new terms that it found unacceptable, including a multiyear reseller agreement with Dell that would remain in effect even if 3Par were to be acquired by another company.

The board of 3Par deemed HP's offer superior.

"We took a measured approach throughout the process and have decided to end these discussions," said Dave Johnson, Dell's senior vice-president for corporate strategy.

Shares of 3Par increased US75 cents, or 2.3 per cent, to $US32.83 in morning trading on Thursday. Before Dell conceded, 3Par shares were trading as high as $US33.84 as investors expected Dell to match or beat HP's $US33-per-share offer.

Dell shares jumped US18 cents, or 1.5 per cent, to $US12.30, while shares of Clifornia-based HP, increased US33 cents, or 0.8 per cent, to $US39.54.

Dell, based in Texas, made the first offer for 3Par on August 16, at $US18 per share. As part of an agreement between the two companies, 3Par must pay Dell a $US72 million ($A79 million) termination fee.

Both PC makers were looking at 3Par as a way to build up their "cloud computing" businesses, delivering software, data storage and other services to customers via the internet. California-based 3Par could also help them cut data-storage expenses.

For either company, the acquisition would come as part of a strategy to grow more profitable lines of business outside the personal computer market.