HP Acquiring ArcSight for $1.5 Billion

HP’s acquisition spree is continuing this week with the $1.5 billion purchase of security-event management vendor ArcSight.

HP (NYSE: HPQ) will be paying $43.50 for each ArcSight (NASDAQ: ARST) share in the deal, which is expected to close by the end of the calendar year.

ArcSight has a number of log and security-event management software offerings that help enterprises mitigate risk and maintain policy compliance. With the new acquisition, HP will be expanding its security solutions into an area where the company hasn’t traditionally held a strong position, according to Jonathan Martin, HP’s vice president and general manager of information management and commercial solutions.

“There is no overlap with the HP portfolio. We believe that this is a brand new pillar that we are adding to our software strategy,” Martin told InternetNews.com. “At the moment, HP Software is very focused on helping organizations with how they build and operate their business services. This acquisition really adds a new pillar around how organizations can secure applications and business services.”

The ArcSight technology will join other security assets that HP has been adding to its portfolio. HP recently announced its intention to acquire code-security vendor Fortify, for instance. HP already had an existing partnership with Fortify, and the companies were bringing a joint solution to market.

The ArcSight acquisition will build on the work of client engagements the companies have been doing together involving HP’s enterprise services division, Martin said.

Arcsight competes against multiple security and event-management vendors, including LogLogic and LogRythm.

“The HP-ArcSight deal illustrates the rise to prominence of centralized log management and security-event management,” Chris Petersen, LogRhythm’s founder and CTO, told InternetNews.com. “HP recognized that it was imperative that they fill this significant gap in their portfolio of solutions.”

From a competitive perspective, HP expects to differentiate its offering by having a complete IT solution for security and development. Martin noted that in his view, many security products are point solutions narrowly focused on a specific problem.

“That’s why we wanted to take the breadth of what the ArcSight platform brings us in terms of the things they see in an organization combined with the depth of the IT operations portfolio from HP,” he said. “By combining those things, we think we’ll have a unique approach for solving risk and improving compliance within the enterprise.”

Moving forward, HP may make further acquisitions to continue to build out its software suite.

“We will continue to evaluate whether we should be expanding the portfolio, organically or inorganically,” Martin said. “If an acquisition makes sense to accelerate either reach into the marketplace or time-to-market, then we’ll evaluate that in the context of our broader strategy.”

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

Follow eSecurityPlanet on Twitter @eSecurityP.

Sean Michael Kerner
Sean Michael Kerner is an Internet consultant, strategist, and contributor to several leading IT business web sites.

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