HP Pulls an Intel, Buys Security Software Firm ArcSight for $1.5 Billion

HP ArcSight

Intel tried to sew up the "other" end of the computing business (i.e. the user experience end, versus its chip business) recently by buying McAfee. Now PC maker Hewlett Packard is doing something similar: It's buying ArcSight, a corporate-level PC security software firm.

In a press release just now, HP noted it's signed a "definitive agreement" to pay $43.50 per share to own ArcSight, which amounts to an enterprise value for the firm of $1.5 billion. It's all about improving "security, reducing risk" and facilitating "compliance at a lower cost for customers," according to HP. The company's expertise in selling software that lets firms detect incoming hacking threats, monitor Net activity inside the company and spot activity like theft or fraud, is "highly complimentary" to HP's current portfolio of security activities.

HP's intention is to offer an integrated solution to customers—a tightly matched suite of hardware and software, aimed at corporate buyers, with the promise of both performance and Internet security. With its recent $2.4 billion acquisition of 3Par, a storage seller, HP's definitely aggressively acquisitive at the moment, and is really trying to round out its product offerings so that it becomes more than merely a "PC maker." This would help HP distinguish itself from its peers in a crowded marketplace, and is a pretty good way of insulating yourself against unforeseen market fluctuations: By appealing to corporate as well as consumer-level customers, and wrapping in service-like offerings as well as had products, it's protected by rapid-moving swings in the industry (such as the influx of netbooks for consumers a few years back).

The move is also a gentle PR plus, being about sophisticated corporate security, unlike Intel's blunder on the McAfee acquisition news, which made the chip-maker appear complacent about the previous decades of agony and expense caused by PC viruses and malware.

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