Hewlett-Packard Co. made a major play in the Internet services market by acquiring the Internet security system of Secureware Inc.
Secureware is the software company behind Security First Network Bank, which bills itself as the first Internet-based bank.
Hewlett-Packard, the Palo Alto, Calif.-based hardware vendor, announced it will buy the bulk of Secureware's software designed to secure transactions on a communications and operating system level.
In addition, more than 40 Secureware employees are slated to move to HP's newly formed Internet security unit. Secureware president David Arnovitz, the highest ranking employee to jump to HP, is slated to become the Internet security group's chief engineer.
Security has become a high priority for banks seeking to do businees over the Internet.
By pairing its Unix-style hardware with proven on-line security software, Hewlett-Packard hopes to establish itself as a premier vendor of electronic commerce systems - particularly to the financial services community.
"What we've done is underscored our Internet-based banking activity," said Ruann F. Ernst, general manager of Hewlett-Packard's financial services business unit.
Ms. Ernst said the company is already installing systems at three banks. She declined to identify them.
Hewlett-Packard also will license Secureware's network security software, dubbed Hannah, and file protection software, calledTroy.
In addition to its affiliation with Security First, Secureware is associated with Five Paces Software Inc., which develops the banking applications for Security First and other banks. Secureware and Five Paces share a common chief executive officer, Michael C. McChesney.
Ms. Ernst said the Hewlett-Packard deal would have no negative effect on the three banks that have invested in Five Paces - Huntington Bancshares, Wachovia Corp., and Area Bancshares.
"We feel very good about their (Hewlett-Packard's) selection of this technology," said Bill Randle, a senior vice president at Huntington.
"This just strengthens our position with regard to our investment in Five Paces," he added.
