HP has been on an extensive buying spree in the software business but, far from being sated, the company's appetite for further acquisitions remains, according to the company's senior vice president Tom Hogan.
HP has bought five companies in the past 16 months: Mercury Interactive, Opsware, SPI Dynamics, Bristol Technology and Peregrine.
But the company says it won't stop there. "We are looking to grow more in the software business," said Hogan, adding that, if the growth came quickly, "it can't all be organic growth". Hogan was speaking at a press conference held at HP's Software Universe conference in Barcelona on Monday.
Hogan would not divulge any information on which companies he might be considering buying, and he would not confirm that the company was actively looking. All he would say was: "We will continue to do this [acquire software companies] and we will focus on the market leader."
The company is "committed to massively elevating the strategic relevance of HP software", Hogan said. "[Software is] the fastest-growing and most profitable line of business within HP... and from a margin basis the most profitable". Two years ago, it was break even, according to Hogan.
HP has built itself a considerable software portfolio, mostly through its acquisitions. Easily the biggest was the purchase of Mercury Interactive in July last year. The company paid $4.5bn (£2.2bn) for Mercury, a figure that represented a huge premium on the company's share price at the time, estimated at 33 percent.
In July this year, HP spent another $1.6bn (£780m) on Opsware, a company that offers products and services for provisioning and configuring servers and network infrastructure.
Two years ago — prior to these purchases and under the stewardship of Nora Denzel — HP's total software business was worth about $1bn (£485m) but was barely profitable. In the last quarter of 2005, it made just $27m (£13m) profit from $311m (£151m) in revenue.
According to Hogan, HP has seen revenue double from the fourth quarter last year to the fourth quarter this year, which has now reached $698m (£339m). For the full year, software revenue is $2.33bn (£1.13bn), but the level of profit is unclear. Hogan would only say that profit "is up 306 percent, year on year".