HP has made a takeover offer to Mercury shareholders of over 30% above their shares’ current price.
A number of Mercury portfolio elements will broaden HP’s current delivery around its already extensive OpenView system management offerings, extending their capabilities in the application management space. In particular, Mercury’s recent acquisition of service-oriented architecture (SOA) management capabilities from Systinet is now likely to be used to update OpenView, and increase its attractiveness to customers adopting this important enterprise IT strategy.
Even very recently, HP was mainly talking about IT transformation in terms that made it seem a little remote from the real business issues that its customers wrestle with. Suddenly the prospects of engaging with the issues of the application lifecycle, and IT governance overall, sees that picture greatly changed.
The acquisition should prove an important step up the value chain for HP, and also a sign that its software portfolio is more likely to become a focus of investment than it previously seemed. Whether we will see HP make further software acquisitions is currently the subject of much speculation, with a CNN Money article even postulating the benefits of HP looking at a much bigger catch, Symantec – while HP described its play for Mercury as ‘game-changing,’ that would really rock the boat!
Pressures to shorten delivery timescales, and quickly accommodate increasing volumes of change, are leading customers to see the whole IT lifecycle as a single process, rather than separate worlds of application development and live operation. HP’s acquisition of Mercury holds the prospect of customers having the capability to get to grips with issues around the business outputs from IT within the same framework as IT’s more technical delivery issues.
HP needs to ramp up the profile of its services organization, and this acquisition has the potential to propel its presence further beyond the data center, into the development departments and business units of customer organizations.
Certainly, there are now good prospects for HP to bring its software (and probably services) to bear in tackling application performance, quality, portfolio management, governance, and many other high-impact IT management issues that directly affect organizations’ ability to deliver business value from IT.
Source: OpinionWire by Butler Group (www.butlergroup.com)
