I realize that my friendly neighborhood analyst is just trying – and usually succeeding – to goad me, but sometimes they are serious. A quick recap:

HP’s R&D efforts include seven HP Labs facilities around the world, an extended R&D ecosystem, 30,000 technical contributors in the business groups and Labs, and $3.6bn in total R&D budget.

HP’s M&A activities include 34 software, hardware and services mergers and acquisitions (follow the link to a very useful table) after The Big One (i.e., Compaq) worth billions of dollars. Our M&A strategy is guided by a large, dedicated and wickedly smart team using a tightly engineered process based on an in-house developed framework.

So, yes HP does has “Invent” in the logo and yes, we spend a boatload on M&A. However, they are not mutually exclusive. It all comes down to what is the best way – best in terms of cost, time to market and intellectual property – to develop a particular capability. Sometimes the best approach is organic development and sometimes it means dragging out the checkbook (good for us that HP is a cash generating machine).

The key for HP is that M&A and R&D dovetail tightly. CSTO Shane Robison has both functions along with strategy in his portfolio. All of HP’s CTOs report directly to him as does the head of M&A. So he can look at an opportunity and spin the dials to come up with the best solution.

To illustrate this approach let’s look at the three industry trends that HP has decided to drive: Always Connected Mobile Experiences, Digital Imaging and Printing and Next Generation Data Centers. To address each of these trends, we have leveraged both M&A and R&D. By coordinating both sides, HP was able to fill in specific holes quickly, efficiently and at a price that makes sense without duplication of efforts.

Bottom Line: There is a real competitive advantage for HP to have both a massive R&D ecosystem and a well-oiled M&A machine. What elevates HP even more is how tightly integrated the two are.