Cyber Pays, Commodities Don't

HP announced the latest in a string of acquisitions on Monday, with plans to buy security software company ArcSight for $1.5 billion in cash. In the last six months, the PC manufacturer has announced plans to acquire Fortify, 3Com, Palm and 3PAR, to name a few, giving it a larger footprint in networking, mobile computing and -- most notably -- security.

The moves are bold, but not surprising. Not unlike chip manufacturer Intel, which last month announced plans to buy McAfee, HP has long been in the commodity business, which offers thin margins. The best way to compensate is through the buy up of modest-sized companies that play in growth markets (ie, networking, mobile computing, security) and offer substantial growth margins.

Expect more of the same.