HP open to spending billions to buy a software firm

Hewlett-Packard Co. will consider spending billions of dollars to buy a software company to expand its fastest-growing business, HP software chief Tom Hogan said this week.

Hogan said he was looking at market leaders in selling data management software and business intelligence programs for deals that could play out over the next 12 months, but he declined to give specific names.

Palo Alto-based HP is building on a mergers-and-acquisitions strategy that began with last year’s $4.5-billion purchase of Mercury Interactive Corp. Before that, the world’s largest maker of personal computers aimed to reduce risks by keeping M&A; fairly small.

“We will go out and determine who the market leader is,” Hogan told Reuters. “In some segments, that could be a $300-million to $500-million company. In some cases, it could be a $5-billion to $10-billion move. But that is what it takes to get the market leader.”

Companies making business-intelligence software -- programs that analyze business trends -- have been hot takeover targets this year, with IBM Corp planning to buy Cognos Inc., SAP buying Business Objects and Oracle Corp. scooping up Hyperion Solutions Corp.

Hogan said HP was interested in products that back up and archive e-mail and that save data for compliance.

“When we have to move, let’s go out and find out who the premier, undisputed market leader is. Let’s leverage our balance sheet, go and write the check. That’s a very different acquisition strategy,” Hogan said.

HP’s new approach to acquisitions emerged over a series of discussions among senior executives as they reviewed the Mercury purchase, Hogan said. The strategy would reduce risk because the market leaders HP plans to pursue would have established credibility, brands and sales channels, he added.