When Carly Fiorina was running the show at Hewlett-Packard
That does not seem to be the case with the company's new CEO, Mark Hurd. This week, he announced two deals, both of which appear to be strong fits with Hewlett-Packard.
First, HP purchased AppIQ, a privately held company (the price tag was not disclosed). Basically, AppIQ develops technologies for complex storage needs. The company has roughly 250 customers and 135 employees.
As companies do more business online -- and as regulatory requirements increase -- there is a substantial need for better storage. What AppIQ provides is a platform that can coexist with many types of IT environments and storage applications. What's more, its software is designed to simplify the various moving parts within a given IT environment, lower costs, and help management get more control over information (read: greater practical application).
HP has been weak on the storage front. This, according to the company, fills the gap. What's more, AppIQ and Hewlett-Packard have worked closely over the years.
The other HP purchase was for Peregrine Systems. The price tag comes to $425 million, which is about two times revenues (a normal valuation metric in the software industry). Peregrine is the result of many acquisitions during the 1990s, but in 2002, accounting scandals resulted in a bankruptcy filing. Despite the turmoil, customers still liked the company's products (there are about 3,500 customers) -- something of a testament to the strength of those products.
Peregrine develops technologies that help with IT asset management. Interestingly enough, many companies have little transparency in knowing what IT assets they have, where they are located, and what the true cost is. That's essentially where Peregrine helps. Often, companies use high-paid consultants and internal personnel to perform these duties. But Peregrine systems are updated in real time. What's more, with the Sarbanes-Oxley Act, it is important for public companies to have a better understanding of their IT assets, which has also been a boost to Peregrine's business.
The enterprise software market is not an easy place to get by in. But HP has opted to focus its energies on larger companies. By my interpretation, HP wants to provide an opportunity for its customers to outsource much of their IT management by providing things such as application management, identity management (for security and access), governance, and so on. To create a streamlined platform and in turn attract customers, HP would do best to have a comprehensive group of services, which it had lacked. With these acquisitions, HP can now provide sophisticated storage management and asset tracking. What's more, it can offer these services on a global scale.
Basically, this is something only a few companies, such as IBM
Fool contributor Tom Taulli does not own shares mentioned in this article.