Update: HP to buy ArcSight for $1.5B

IDG News Service -

Hewlett-Packard announced Monday that it has agreed to purchase security vendor ArcSight for $1.5 billion. The deal is expected to close by the end of the year.

ArcSight sells a series of products for monitoring suspicious activity on corporate networks. Combined with HP's own IT management software, the products will allow customers to detect threats, understand their impact and take corrective action, said Bill Veghte, executive vice president of software and solutions at HP, during a conference call.

"Smash-and-grab" security attacks have been replaced today by more sophisticated and sustained attempts, and such threats are impossible to detect without gaining a comprehensive view of all IT activities, he said.

The ArcSight deal follows HP's recent move to purchase Fortify, which gave it capabilities for strengthening security before applications are compiled, he said.

In addition, security customers are looking not only for software but complementary hardware and services, and HP can deliver that combination, Veghte said

The acquisition is the second major purchase announced by HP in recent weeks. It is also buying storage vendor 3Par for $2.35 billion, following a heated bidding war with Dell.

ArcSight had been a rumored acquisition target in recent weeks, with Oracle, IBM and EMC also interested, according to reports.

Executives declined to discuss whether there was a competitive bidding process for ArcSight, or when talks began.

HP is "very confident" in its offer for ArcSight, according to Steve Fieler, vice president of investor relations. But he declined to say whether HP expects competing bids will emerge.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com