Hewlett-Packard executives made it clear Monday that it will go shopping to fill in software gaps in three clear areas: Analytics, security and platform as a service.
HP CFO Cathie Lesjak said that the company will be disciplined about its shopping list, but will remain acquisitive. To prove HP will remain disciplined, Lesjak projected $7 a share in non-GAAP earnings in 2014 and raised its dividend by 50 percent.
That offering should keep investors at bay as HP goes shopping.
HP's guiding acquisition principle is clear, said Lesjak. "We don't want to invest in the technologies of yesterday," she said. "We want to move into IP that helps us manage environments. We are going to be an active acquirer of companies at different lifecycles."
She also highlighted HP's relatively recent shopping sprees that have bolstered security, networking and other assets.
For HP CEO Leo Apotheker, the shopping list boils down to three large themes. Here's a look at the three themes and a few potential targets:
Analytics: "Analytics is a huge space that is poorly served today," said Apotheker. "We will leverage this and other technologies to either build or acquire." Apotheker was heavily focused on analytics. He said the trick for analytics is to do it at scale, offer it as a service and focus on future outcomes not past history.
Given Apotheker's focus on analytics and the plan to launch a broader effort in the next 12 months, an acquisition wouldn't be that surprising. Apotheker indicated that HP had a bevy of software intellectual property that hasn't been surfaced and that there are many employees at the company "that spend their entire day on analytics."
The shopping list: The big target for HP here would be Teradata. However, there may be smaller SaaS players too such as GoodData, Acteea and PivotLink that may fit in with HP's analytics as a service pitch.
Security: "There's a huge opportunity here," said Apotheker. "We could be doing much more on the security side." For HP, security is the glue that can link consumer, prosumer and enterprise services.
The shopping list: Symantec is the big dog, but that acquisition would be costly and is a clear stretch. There are plenty of smaller players---Trend Micro, Kaspersky, Reconnex, PGP and LanDesk---that could be acquired and fed through HP's infrastructure. HP has already acquired TippingPoint via the 3Com purchase, Arcsight and Fortify and SPI Dynamics so it may be done for now.
Platform as a service: Apotheker took a little heat for not offering more specifics on HP's platform as a service strategy. "For our platform offering we will develop quite a bit ourselves and there are other things we're going to acquire," said Apotheker. The vision for HP is to offer platform securities at scale and be multilingual.
The shopping list: BMC would be a natural fit here since it can manage IT infrastructure, hybrid shops and is moving to cloud. HP could also buy its way into the platform business with Rackspace. Any platform play that could benefit from HP's distribution could be in play. HP has the clout to build a platform as a service effort so the strategy may consist of smaller purchases.
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