HP 'Fortifies' Security to Capture Opportunities in a Changing Landscape

Includes: HPQ, IBM, ORCL
by: Jessica Breen
HP (NYSE:HPQ) announced its intent to acquire strategic partner Fortify, as consolidation of security companies increases across the industry. Fortify specializes in application vulnerability assessment and security for enterprises.
Fortify is a strategic acquisition for Hewlett-Packard for two reasons. It is a strategic acquisition to prevent competitors, like IBM (NYSE:IBM) and Oracle (NYSE:ORCL), from acquiring HP’s key partner for application lifecycle security. Application Lifecycle Management (ALM) is an area that is becoming more strategic to HP Software and Solutions for delivering enterprise application support tools for customers. TBR believes the acquisition is also a competitive response to security consolidation. Fortify is complementary to the acquisition of SPI Dynamics in 2007, as both purchases address application vulnerabilities; however, Fortify offers more thorough code reviews and deeper techniques than SPI Dynamics.
Fortify reflects a broader set of trends including consolidation of the security vendor landscape, the increasing importance of security for hybrid on-premise, cloud and mobile environments, and increasing integration of security across portfolios and products. In May 2010, Oracle acquired Secerno to provide database security while IBM purchased Ounce Labs in 2009. TBR believes security solutions allow vendors to differentiate solutions while provisioning for growth in cloud and mobility. HP may also use the security technology to help develop better solutions for hybrid clouds and mobility. Fortify’s security solutions provide HP with the capabilities to support corporate strategies of enabling cloud and moving into mobility through the Palm acquisition.
HP will operate Fortify as a standalone business and will later integrate the security vendor into the company to ensure customers have continuous security through the integration process. HP intends to provide enterprise level security that will provide risk management, compliance requirements, and malicious virus protection for applications. Fortify will be integrated into HP Software and Solution’s Business Technology Optimization (BTO) segment for applications support.
Customers will benefit from increased enterprise security that can be applied to other areas of HP Software and Solutions’ BTO portfolio after Fortify is fully integrated. As systems management vendors work to provide end-to-end IT, customers benefit from a single vendor and greater integration.

Disclosure: No positions