HP, Intel, IBM Spend Too Much, Innovate Too Little - Today's Outrage

NEW YORK (TheStreet) -- All the recent takeover activity by HP (HPQ), Intel (INTC), IBM (IBM) and so many other technology companies reveals an inexcusable lack of innovation.

With so much money to toss around, it's embarrassing that these companies are unable to fund their own research & development. Waiting for another company to create something worth buying is among the most expensive and inefficient ways to grow a business.

Just look at the price tags -- Intel is spending $7.7 billion for McAfee (MFE) and $1.4 billion for Infineon's (IFX) wireless-chip business, HP is now offering $2.06 billion for 3Par (PAR) (double the original deal with Dell (DELL), which wisely dropped out of the auction) and Cisco (CSCO), is reportedly looking to grab Skype before an IPO that is expected to value eBay's (EBAY) Internet calling unit at $5 billion.

There also are plenty of smaller deals in the making, such as IBM's $480 million purchase of marketing software company Unica (UNCA) and VMWare's (VMW), $100 million takeover of Integrien, which makes systems monitoring software.

These takeovers amount to an admission of failure by the buyers. Clearly they did not have the foresight or wherewithal to push in these new directions on their own. They let other companies take the risk and now reap the rewards.

As TheStreet's Scott Moritz noted recently, HP's desperate battle with Dell for 3Par is considered an attempt to acquire some of the next generation "cloud" computing technologies that threaten to undercut its own hardware business.

With all its resources, why wasn't HP out in front in the cloud computing movement? While suddenly hot because of all the M&A activity, cloud computing has been gaining momentum for a long time as businesses turn to cheaper virtual computing systems instead of buying more expensive hardware.