NEW YORK (TheStreet) -- Hewlett-Packard (HPQ) has agreed to buy Eucalpytus, a developer of software for cloud computing, for reportedly up to $100 million, but the deal is far more critical than the price implies.
HP's stock was down by a penny late Friday morning, but it rose Thursday after CEO Meg Whitman indicated the company is in a financial position to make acquisitions.
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The reported price for privately held Eucalyptus is less than what HP paid in U.S. fines this week to settle charges of bribery in its foreign subsidiaries and less than twice what it paid Russia on similar charges.
The deal for Eucalpytus reveals the problems HP is having selling its version of cloud-computing software, and that should make the acquisition significant to investors.
Eucalyptus offers open-source software that lets companies move workloads back and forth between private clouds and the Amazon (AMZN) Web Service public cloud. AWS dominates the public-cloud market thanks to its early start and low prices. HP's cloud strategy is based on a competing open-source cloud infrastructure, OpenStack.
HP launched its own public-cloud product, called Helion, late last year and has since emphasized its ability to build private clouds for businesses and connect them to Helion using OpenStack. The market for such services is expected to grow to $235.1 billion in 2017 from an estimated $174.2 billion this year, according to research frim IHS.