H-P Acquires Analytics Startup

H-P CEO Leo Apotheker announced his first acquisition as CEO of the largest technology company in the world. The acquisition underscores Mr. Apotheker's desire to pursue "profitable growth" rather than the disciplined cost-cutting results achieved by former CEO Mark Hurd. Next month H-P will announce in greater detail its strategy towards "profitable growth". However, Monday's acquisition sheds important light on the direction H-P is heading.

Vertica Systems Inc. is a small startup that has developed software that can be used by companies to analyze data. The software allows companies to identify emerging trends and other important information in real-time. H-P's competitors such as IBM, Oracle, and EMC have also invested in similar technologies.

Mr. Apotheker's investment in software represents broader efforts by technology giants to become one-stop services for clients. Such a push by H-P, if successful, will result in what Mr. Apotheker calls "profitable growth" given that the software space has higher margins than traditional manufacturing.

As the technology behemoths pursue growth, investors will attentively watch to see how the competition will unfold. Sustained competitive advantage will likely be achieved by those organizations that best create new markets with new technologies.

http://blogs.wsj.com/digits/2011/02/14/h-p-acquires-analytics-startup-in-new-ceo%E2%80%99s-first-deal/