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Will Hewlett-Packard sell off TippingPoint?

As Hewlett-Packard (HP) prepares to split up on 1 November 2015 the company’s security arm – TippingPoint – could be up for grabs

A report on Reuters suggests that Hewlett-Packard (HP) could sell off TippingPoint. The news site reported that a private equity firm had shown an interest in the network security division, believed to be worth up to $300m.

It is believed HP will sell off parts of its business it considers peripheral in the run-up to splitting into two companies in November 2015: HP Enterprise will focus on business IT; while HP Inc will concentrate on the printing and PC business.

TippingPoint was part of 3Com, which HP bought in 2009 for $2.7bn.

During HP's Q3 2015 earnings call, HP's chairman and president Meg Whitman said the company experienced growth in its security and networking divisions.

The TippingPoint product family includes TippingPoint DVLabs; TippingPoint Next-Generation Firewall; TippingPoint Next-Generation IPS; TippingPoint Security Management System; and TippingPoint ThreatLinQ.

While network security fits in well with the HP Enterprise business, some industry observers believe HP will want to exit the already crowded firewall market.

In March 2015 the company bought Aruba. Through this $2.7bn acquisition HP hopes it will be able to meet demand for enterprise users as they shift from legacy infrastructure to a more mobile-enabled workplace, using the 8011 Wi-Fi Alliance standard. Aruba helped boost year-on-year growth of HP's networking division for Q3 2015 by 28%.

In a transcript of the earnings call posted on the Seeking Alpha financial site, Whitman said: "At HP Discover Las Vegas in June, we announced the strategy for Hewlett-Packard Enterprise, focused on delivering solutions to help customers transform four critical areas of their enterprise. 

"These four areas comprise helping customers move to a hybrid infrastructure that seamlessly brings together traditional IT and the cloud, protecting the digital enterprise, empowering the data-driven organisation, and finally enabling workplace productivity. 

"Collectively these four areas represent more than $1tn in total available market where Hewlett-Packard Enterprise is uniquely positioned to win."

Even without the 'protecting digital enterprise' initiative, security is clearly among the ingredients needed to support hybrid infrastructures, data-driven organisations and support workplace productivity. As the company prepares for the November 1 split, the spotlight will now fall on whether or not TippingPoint is part of the HP Enterprise business strategy.

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