News has been circulating the web indicating that EMC may be on the verge of using some of its $5.65 billion in cash to acquire some security companies. EMC COO David Goulden went on record saying that the company is interested in security, making it EMC’s top priority in the acquisitions department.

EMC is known for its storage technology and has amassed its fortune both through steady sales and through acquisitions, such as that of VMware back in 2004. Analysts, such as Brian Marhhall of ISI Group, are now suggesting that EMC may go after firewall makers Fortinet Inc. or Palo Alto Networks Inc. Both companies provide firewall solutions that address more modern IT concerns than many of the traditional approaches used by more prominent security companies.

EMC does have plenty of experience in the security industry. In 2006, it acquired RSA, a company that deals in encryption and network security software. Also in 2006, EMC acquired Authentica Inc., a company that developed enterprise rights management software. In 2007, the company bought the Indian security software company Valyd, with the intention of merging its products into RSA. Also in 2007, it acquired Verid, another authentication company, and Tablus, a firm that deals with data classification and policy-based enforcement of data. Most recently, EMC purchased Archer Technologies in 2010, a company that sells governance, risk, and compliance software.

All of these acquisitions could point to a need to beef up the security in its storage systems and its VMware division, especially if it intends to successfully operate in the cloud, where it faces more network-based risks. Moreover, EMC can strengthen its own security division, RSA, by adding more products to its portfolio through acquisitions.

Regardless of its reasons for acquisitions, EMC’s strategy seems to be working. The company is currently valued at 15 times the earnings that were projected for 2012. Its shares have also gained 19 percent this year. All of that is good news for a company that was once thought to be on the decline.