Great companies often think alike. Take a look at IBM's (NYSE:IBM) acquisition of Watchfire just two weeks ago. Not to be outdone, Hewlett-Packard (NYSE:HPQ) announced yesterday that it is buying Watchfire's rival, SPI Dynamics. Why all the interest?
The traditional approach to information technology security is to develop software to protect existing applications. So why not implement security features when developing applications?
This is the sweet spot for Watchfire and SPI, but the latter may have the better mousetrap.
"SPI is arguably the player to beat here, with probably the most mature toolset for testing during the development process," Nick Selby, director of security practice at The 451 Group, told me recently. "Its AMP platform is first-rate stuff for testing web applications for security vulnerabilities and problems during development, quality assurance, and post-rollout."
HP did not disclose the price tag of the deal or the revenue base, but back in March, SPI announced that it snagged its 1,000th customer and is now the market-share leader. Some of its marquee customers include Bank of America (NYSE:BAC), GM (NYSE:GM), and Oracle (NASDAQ:ORCL).
A big attraction is SPI's expertise in compliance matters. Its systems account for such complex requirements as HIPAA and Sarbanes-Oxley.
Is this the start for HP to make a big move into security? Might the company buy McAfee (NYSE:MFE) or even Symantec (NASDAQ:SYMC)?
On its conference call, management indicated that it does not have outsize ambitions for security. Although for the company to keep growing and increase margins, it's important to invest more into the software space and to do this means having a strong security foundation. And with its acquisition of SPI, HP has made a strong choice.
Further Foolishness:
Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is currently ranked 1,831 out of 30,414 rated investors in CAPS.
