HP-Opsware Bid Boosts BladeLogic’s IPO Price

When HP  moved to buy Opsware earlier this week for $1.6 billion, some industry experts were blown away by the 38 percent premium HP offered for the datacenter automation software maker.

It just goes to show how big companies put greater value on certain markets than others. Now it may be time for other datacenter automation specialists to reap the rewards of that bid.

Opsware  rival BladeLogic today said its initial public offering (IPO) will be 5,000,000 shares of common stock, at a price of $17 per share.

BladeLogic , which trades on the NASDAQ under the ticker symbol “BLOG,” had originally said it expected to fetch $12 to $14 per share. Wednesday morning the stock soared 42 percent to $24.25.

Stephen Elliot, director of enterprise system management research at IDC, confirmed the Blog IPO and valuation were helped by the Opsware deal, noting that they add more short term credibility to the market valuation.

Opsware and BladeLogic, along with Cassatt and a few other vendors are smaller players in a burgeoning market for software that automates mundane maintenance and patch upgrade tasks across networks, servers and storage.

Fundamentally, these companies are trying to create operating efficiencies for their corporate customers by virtualizing various computer functions so that humans don’t have to spend time doing it. In the process, these specialists are also enabling businesses to better address stringent corporate compliance guidelines that preside over digital information.

The so-called Big Four management vendors — IBM, HP, CA and BMC — are interested in carving out big pieces of this automation pie.

IBM  and Opsware are widely considered the top two vendors for the server provisioning aspect of the server automation market, which IDC claims will be $10.4 billion in the next few years. HP’s purchase of Opsware will pose a considerable threat to IBM.

Purchasing BladeLogic might be the answer for Big Blue, which can ill afford to let HP continue to buy market powers such as Opsware and Mercury Interactive.

But The 451 Group analyst Rachel Chalmers isn’t so sure, noting that Tivoli’s System Automation software does a lot of the things BladeLogic does. Chalmers also noted IBM tends to make purchases that will drive its global services business.

“Ironically, the fact that BladeLogic is comparatively easy to deploy (compared
to Opsware; not easy in any absolute sense) may be a disincentive for IBM,” Chalmers said.

IDC’s Elliot said other suitors may come calling to firm up their management stacks. These vendors include CA , BMC , Sun Microsystems and EMC .

“The key is for BladeLogic to make its next few quarters and keep stock dilution down,” Elliot said. “They have a rather small offering [and] dilution pushed the price down.”