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Technology / AI and automation

HP considers software and services acquisitions

We have made some sizable acquisitions like Mercury, but we want to use our strength to deepen our portfolio, HP’s managing director, EMEA, Francesco Serafini, told Computer Business Review. We are looking at software and services.

The acquisition of Mercury effectively doubled Palo Alto, California-based HP’s software business, adding software testing and governance to its portfolio and pushing software revenue towards the $2bn mark.

It is the latest in a series of software acquisitions the company has made in recent years, following the likes of Peregrine, AppIQ, Consera, Novadigm, Persist , RLX Technologies, Talking Blocks, and TruLogica.

Together with the company’s existing OpenView and OpenCall offerings, those acquisitions have turned HP into the sixth largest software provider globally behind Microsoft, IBM, Oracle, SAP, and Symantec, according to HP’s VP and managing director for UK and Ireland, Steve Gill.

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The company will not rest on its laurels, however, as it look to more acquisitions to boost the newly branded HP Software, as well as HP Services. We see very significant growth opportunities in software and services because of the relative fragmentation of those markets, said Gill.

HP Services grew sales and profit in the fourth quarter, with revenue up 5% at $4.1bn and operating profit of $505m. This was after a period of flat growth as the company tried to improve profitability after entering the outsourcing market place with very competitive pricing.

What happened in EMEA was very reflective of what happened worldwide, said Gerry Sheridan, VP of Technology Solutions Group, UK. Job number one in the year we just closed was profitability, job number two was growth. They now become peers. In the full year, services grew 1% and we had 10% operating profit. If you look at Q4 we had 5% growth and 12.4% profit. That’s the kind of performance we’re aiming for.

While Mercury is a software business, Ian Curtis, director of software for HP UK, also maintained that it provides a big opportunity to drive the services business in Europe where Mercury has been relatively weak, as the company drives it business technology optimization message.

Apart from technology services opportunities from software acquisitions, HP is also looking at opportunities for pure services acquisitions in the emerging Eastern Europe market. This is an opportunity HP has been talking about for over a year, although it has yet to make a substantial services acquisition.
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CBR Staff Writer

CBR Online legacy content.