HP to Buy Cloud Startup Eucalyptus Software in Rare Acquisition

Hewlett-Packard Co plans to buy cloud software startup Eucalyptus Software, a rare acquisition for the company since its failed $11 billion purchase of Britain's Autonomy Plc in 2011.

HP did not say how much it will pay for Eucalyptus, which provides open-source software for building private and hybrid clouds, or Internet-based computing services. A source familiar with the deal told Reuters that HP would pay less than $100 million. Tech blog Re/code first reported the price tag earlier on Thursday.

The acquisition is expected to close in the fiscal fourth quarter, after which Eucalyptus Chief Executive Officer Marten Mickos, a proponent of open-sourced software, will join HP as senior vice president and head of its cloud business.

He will report to CEO Meg Whitman. Among his duties will be building HP's "Helion" cloud computing services, the company said on Thursday.

Martin Fink, who now leads the cloud business, will remain chief technology officer as well as director of HP Labs, which focuses on researching next-generation products.

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HP, once the world's largest PC maker but now trying to become a leading provider of hardware and software to corporate and government clients, was forced to write down much of Autonomy after the company said it discovered serious accounting irregularities.

It ended the July 2014 quarter with $4.9 billion in operating company net cash. In August, Whitman told analysts HP was in a position to make acquisitions if needed, though it remains committed to returning half its cash to shareholders.

© Thomson Reuters 2014