HP has announced it is acquiring Knightsbridge Solutions Holdings Corp., a services company specializing in business intelligence, data warehousing, data integration and information quality. Financial terms of the transaction were not disclosed. Knightsbridge has approximately 700 employees and concentrates on large enterprise-wide information management solutions in Fortune 500 companies.

Knightsbridge is a solid acquistion, but in an $90 billion company its revenue is trivial. So why would HP buy it? It makes more sense if it is part of a strategy to build out HP’s overall portfolio of information management (IM) solutions, which includes data warehousing, business intelligence, data integration and performance management.

When a customer examines the HP website they see that its current IM portfolio includes its own hardware and infrastructure management software, while partnerships fill in the much more strategic (and profitable) components of IM software and systems integration.

Knightsbridge expands HP’s IM professional services offerings (putting them in competition with its SI partners) but it that enough? For a $90 billion company that fashions itself to be IBM’s main competitor, expanding into software and specifically into the IM market – just as IBM is doing – would be a terrific strategy.

HP has shown it is interested in software with its $4.5 billion acquisition of Mercury Interactive. Also, there were rumors this week that it was planning to acquire security software vendor Symantec Corp.

HP CEO Mark Hurd told an analysts’ conference in New York yesterday "We have more work to do. We are a company that is transforming – not a company that has transformed.” HP has shed 15,000 jobs this year and Hurd said that they have more work to do to trim expenses.

Meanwhile, he stated that their target was to be $100 billion dollar company groing 6% over the next two years driven by its computer hardware and printing business. As good as their hardware and printers are, they are commodities.   For the long-term HP needs to move into other growth areas such as software. You can’t cost-cut your way to growth! HP can increase profits in the short-term by cutting jobs and expenses, but they need revenue growth for the long-term.

In my post of 11/28 “Business Intelligence Pure Plays: A stock rebound!” I stated that “…HP should also consider acquiring BI and data warehouse companies. I have NOT heard any rumors regarding HP, this is just a idea that I believe would be a strategic move for HP.” I suggest that the Knightsbridge acquistion should not be HP’s last information management acquisition if it is trying to build an IM portfolio of value to its customers (and to itself.)