SAN FRANCISCO (Dow Jones)--A fierce bidding war for a tiny data-storage company underscores a significant shift in computing that may signal the declining prominence of the traditional PC.

On Friday, Hewlett-Packard Co. (HPQ) and Dell Inc. (DELL) both raised their bids in a two-week battle for 3Par Inc. (PAR). The Fremont, Calif., company, which was worth just a little over $600 million when the takeover fight started, now sports a market capitalization of more than $2 billion.

3Par makes virtualization products for storing data efficiently at data centers. The technology is crucial in the rapidly growing field of cloud computing, ...