9 Companies HP Could Buy With Its $10B War Chest

Positioned To Buy

Hewlett-Packard is splitting into two companies, one focused on PCs and printers, the other on enterprise technology. HP CEO Meg Whitman will be CEO of the HP Enterprise company and she's said, in no uncertain terms, that her company will be on the lookout for companies to acquire.

HP Enterprise will be a leaner, meaner fighting machine set up with more than $10 billion to go out and start picking off top talent and technology, according to Whitman. Following are nine startups and tech vendors HP partners have told CRN they think could be good fits.

9. Cleversafe

Cleversafe, a Chicago-based vendor founded in 2004, sells object storage technology. HP already has object storage from its 2009 acquisition of Ibrix, but HP partners told CRN recently that technology isn't up to par with Cleversafe and other object storage offerings currently on the market.

Sources told CRN last month that HP was planning to do an OEM deal with Cleversafe, which specializes in handling petabyte-scale amounts of unstructured data, like email, video, photo and audio files. HP already sells Cleversafe on three of its Proliant servers.

Cleversafe has raised $100.4 million in four funding rounds since its start, including a $55 million Series D from New Enterprise Associates in August 2013.

8. Scality

Scality, a San Francisco-based object storage vendor, would give HP several benefits, including active involvement and contribution to OpenStack, a track record doing business with HP in Europe and software-only product with no certification requirements.

Scality also has an existing partnership with HP, as its solution can be configured using the ProLiant SL4540, DL380 or DL360 servers. Scality in mid-October inked a global reseller deal with HP that will see it sell Scality's RING software on its industry-standard x86 servers.

HP's salespeople and channel partners will sell the joint products, and the reseller deal also includes joint sales and marketing investments between the two vendors.

7. DataGravity

DataGravity, of Nashua, N.H., is a startup founded by executives from EqualLogic which Dell acquired for $1.4 billion in 2008. Its storage appliances, which meld together data protection and analytics, have attracted attention from VCs such as Andreessen Horowitz, which led a $30 million funding round last year.

DataGravity's appliances are more than just SANs; at $50,000 to $100,000, they're able to deliver functionality to customers that typically costs 5 to 10 times more.

HP CEO Meg Whitman often talks about the "new style of IT" where multiple different functions are being integrated on commodity hardware, and DataGravity is an example of a startup that does its magic through sophisticated and proprietary software.

EqualLogic's channel friendly pedigree also would make DataGravity a good fit for HP as a whole, which has been building up some serious channel credibility since Whitman took over as CEO, and especially for HP Enterprise.

6. Simplivity

HP and hyper-converged startup Simplivity have a bit of recent history: Sources told CRN in May the vendors were talking about a potential acquisition, but Simplivity CEO Doron Kempel subsequently denied any talks had taken place.

Sources told CRN HP was interested in Simplivity but wasn't willing to pay asking price, reported to be in the $2 billion range. Simplivity subsequently inked a reseller deal with Cisco in August.

SimpliVity's OmniCube product combines compute, storage backup and deduplication, networking, WAN optimization and other enterprise technologies into a single x86 server. The vendor's strength is storage, which isn't surprising as its staff includes several former EMC employees.

HP wasn't able to strike a deal with Simplivity earlier this year, but now, armed with $10 billion, it's possible Whitman might take another look at a vendor that would fit very well with her "new style of IT" mantra. This is the sort of technology that could give HP a boost in a key market.

5. Nutanix

Yes, buying Nutanix would be expensive. The hyper-converged infrastructure startup has raised $312 million to date, including a $140 million Series E in August. The company's valued at around $2 billion. And yes, Nutanix has said it's aiming for a possible IPO in 2015. And then there's Nutanix's OEM agreement with Dell, the first products of which are expected soon.

But despite the obstacles, if HP were to acquire Nutanix, it would immediately catapult itself to the front of the line in a red hot new market. It would be a big, bold move to bring new technology into the HP converged infrastructure portfolio, giving HP the kind of cutting edge innovation it used to routinely crank out.

Nutanix also has used a channel friendly distribution model from day one, which is somewhat unusual for a startup, and would provide another benefit to HP.

4. Pivot3

Pivot3, an Austin, Texas-based converged infrastructure vendor that's focused on VMware virtual desktops and video surveillance, isn't really a startup -- it's been around since 2003. But as an early mover in the converged infrastructure space, it's a vendor that could bring important technology to the HP Enterprise portfolio.

Pivot3 develops a proprietary software called vSTAC OS that lets virtual servers, storage and networking run together in a single 2U node. As customers grow in size, they can scale by adding more appliances.

HP is building its own hyper-converged appliance with its own hardware and software, and it's also doing it based on VMware's EVO: RAIL reference architecture. With Pivot3, which has raised over $126 million in funding to date, HP would be able to offer technology tailored to specific use cases.

3. Splunk

HP touted the need for stronger data security earlier this year at its Discover conference. Splunk, a big data and security startup that had its IPO in 2012, could be one of the companies on Whitman's acquisition radar. Its operational intelligence software is a way for enterprises to keep track of massive amounts of machine data and other data.

HP's own ArcSight security product competes with Splunk, and earlier this year some HP employees got into trouble when they launched a site called Splunkfail.com to point out its flaws. While there's some overlap here, some partners think Splunk, founded in 2003, could be a good fit for HP Enterprise.

2. Nexenta

Nexenta, a vendor in the software-defined storage space, is getting lots of attention because it promises to free customers from vendor lock-in and is cheaper than many existing storage solutions on the market.

Nexenta CEO Tarkan Maner was previously CEO of Wyse and is one of the most well-respected figures in the tech industry.

While Nexenta has a close relationship with Dell, which uses its technology in its "Blue Thunder" infrastructure offerings, it would also be a fit for HP's new direction toward open source and interoperability with other vendors.

Nexenta has raised around $50 million since its founding in 2005.

1. Palo Alto Networks

Palo Alto Networks, a red-hot security vendor with a $7.7 billion market capitalization, would probably be too rich even for the hefty war chest HP currently has. But there are all kinds of reasons why it would fit at HP, including great technology and a channel-focused, go-to-market approach.

Some analysts have speculated that HP, hungry for security and big data technology, could go after Palo Alto Networks or its main rival, FireEye.

Given that security is only going to become more important in the future, HP could dramatically improve its standing in security -- long a major strategic focus with acquisitions like Fortify and ArcSight -- by splashing out on a big acquisition like Palo Alto Networks.