HP Blasts Off With Mercury

HP  can officially begin transforming its software business as a one-stop shop for business technology optimization (BTO) after completing its purchase of Mercury Interactive Corp. for $4.5 billion today.

Operating as a new subsidiary, HP Software will offer customers application management and delivery and IT governance capabilities along with its OpenView management software portfolio.

Taken together, these assets will form the meat of HP’s BTO strategy, which HP said is a category of software and services that helps CIOs better gauge the value of IT investments.

“We’re going to drive BTO very hard in the market,” said Yuval Scarlat, vice president of product strategy at HP Software, told internetnews.com, noting that eight Mercury executives, including himself, began their new positions at HP Software today.

The unit has yet to put former Mercurry CEO Tony Zingale in a formal role.

A combination of the Mercury and OpenView software lines should help HP take the next big leap into offering service-oriented architecture (SOA) software that is tailor made for the disparate and distributed computing of any business.

SOAs  are high on CIOs priority lists for their ability to let programmers reuse assets such as software and services; experts say cutting down the amount of time developers spend writing code to can lead to more productive IT shops.

“SOA is all about business technology optimization, and the combination of the OpenView product line with Mercury BTO heralds a new era of full-lifecycle IT management for organizations as they progress down their SOA roadmaps,” said ZapThink analyst Jason Bloomberg.

HP Software, which Scarlat said will unfurl a detailed software roadmap at its HP Universe event in Vienna next month, has some serious goals to meet with its BTO plan.

These include: matching IT resources with business needs; ensuring that applications meet performance and quality levels; automating the management IT assets and services; linking applications and services with middleware to provide a holistic view of dependencies and changes; and mitigating risks in the face of compliance regulations.

Thomas E. Hogan, senior vice president of software at HP, will helm the BTO undertaking, reporting to HP CEO Mark Hurd. Hogan joined HP this past from February from Vignette Corp., where he had been the CEO.

Hogan moves forward with one less executive to manage; Todd DeLaughter, who was the head of HP’s OpenView business under Hogan, left last month to become CEO of IT automation management software startup Opalis.

Gartner analyst Kris Brittain told internetnews.com that DeLaughter’s abrupt departure was hardly surprising.

After seeing them present together in person, Brittain said it was clear there was no chemistry between Hogan and DeLaughter. Meanwhile, she said Hogan increasingly seemed to have Hurd’s ear.

Overall, Bloomberg said he has been quite impressed with the “well thought out” process that HP has undertaken for this acquisition.

“HP knows from experience that large acquisitions are difficult and risky, but they’ve learned many lessons of the past, and there’s a good chance this combination will be successful, and the combined company promises to be able to meet the dynamic needs of their customers moving forward,” Bloomberg said.

The acquisition was forged during some tough times at HP as Hurd and the company endured federal scrutiny over a pretexting scandal that led to the exodus of many senior managers, including board chairwoman Patricia Dunn.

With Mercury tucked in, HP will be better able to compete with IBM , CA , and BEA  on the SOA front.

But IBM isn’t taking the news quietly: IBM today pulled the trigger on two new programs that offer customers 25 percent discounts to HP Mercury and OpenView customers who migrate to IBM.

The Rational migration program is aimed at HP and Mercury client, while the Tivoli migration program is targeted at clients using HP OpenView software, including OpenView Network Node Manager, OpenView Select Federation, OpenView Compliance Manager and HP Storage Essentials.