HP Buys ArcSight to Bring Security to the Cloud

Hewlett-Packard (s hpq) has agreed to buy security software maker ArcSight (s arst) for $1.5 billion in cash, as the computer giant tries to expand the range of services it offers corporate clients. Cupertino, Calif.-based ArcSight’s products are used by corporations and government agencies to detect suspicious activity on their networks. The purchase price represents a 24-percent premium to the software company’s trading price before the offer was made.

Analysts said the acquisition of ArcSight is part of HP’s move to offer more value-added services to corporations who are trusting an increasing amount of data to the cloud, whether it’s a cloud the company itself operates or one run by a number of SaaS providers. As VMWare (s vmw) CEO Paul Maritz said recently, this move places an increasing strain on security systems as data flows out of the corporate network and onto a variety of third-party platforms and mobile devices. In HP’s news release about the deal, HP VP Bill Veghte said “the perimeter of today’s enterprise is porous.”

Aaron Rakers, an analyst at Stifel Nicolaus, told Bloomberg that the acquisition of ArcSight will help HP serve the data-center market, which he described as necessary to the company’s growth strategy as it tries to turn its leadership in PCs into a bigger role in corporate computing. Other hardware makers are also investing in security: Intel Corp. (s intc) recently agreed to pay $7.68 billion for security software maker McAfee.

HP, which is still struggling with the departure of its former CEO Mark Hurd — who has since joined competitor Oracle as a senior executive, a move that’s now the subject of a lawsuit between the two companies — has been moving into the storage and data-center market with a number of recent acquisitions, and seems to be willing to pay a hefty premium in order to do so: The company recently won a bidding war with Dell (s dell) for the right to buy storage-system maker 3Par for $2.35 billion, a price more than three times the company’s market value before the bidding began.

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