Skip Links

Network World

  • Social Web 
  • Email 
  • Close

When will HP's software shopping spree pay off?

Opsware buyout pricey but could give HP an edge over big software rivals
By Denise Dubie , Network World , 07/26/2007
Newsletter Signup
  • Share/Email
  • Tweet This
  • Comment
  • Print

By announcing plans this week to acquire data center automation vendor Opsware, HP continued to prove it is "serious about software," but the pending purchase has industry watchers wondering when HP's software strategy will evolve from one of spending money to making it.

HP's $1.6 billion bid for Opsware puts its investments in software over the past few years at about $6.5 billion, according to Thomas Hogan, senior vice president of HP Software. CEO Mark Hurd reported in June that HP had shifted its primary R&D focus from hardware to software and spent $500 million to integrate its now renamed OpenView software with acquired technologies. With 2006 software revenue of approximately $2 billion (a small percentage of HP's $90 billion total revenue last year), HP is spending more than it generates in software revenue annually.

"[The Opsware acquisition is an] excellent move for the future of HP Software in terms of technology,” says Jean-Pierre Garbani, a research vice president at Forrester Research. "How are they going to get their money back is a big question; let alone how they are going to make money."

What HP has been buying
In addition to its proposed acquisitions last week of Opsware and Neoware, HP has made or announced more than 20 acquisitions in little more than two years. HereÕs a sampling:

Acquisition:

SPI Dynamics

Bristol Technology

Mercury Interactive

OuterBay Peregrine Systems

AppIQ

Completed: Expected to be closed by the end of July. March 2007 November 2006 February 2006 December 2005 November 2005
What HP gets: Web-application security software. Business trans-action monitoring software that covers Java 2 Platform Enterprise Edition, .Net and main-frame-based applications. Application quality assurance, load-testing and performance management software as well as IT governance technology. Information life-cycle management technology and database archiving and management software. Asset manage-ment technology, which includes tools to determine the financial costs of support and maintenance. Storage-area network and storage resource management capabilities.
Note: HP didnÕt disclose what it paid for these companies, except for Peregrine, which cost $425 million.
Click to see: HP buying spree

The Opsware deal, expected to close by the end of HP's fourth fiscal quarter, would become the company's third-largest acquisition behind Compaq (about $24 billion) and Mercury Interactive ($4.5 billion). Industry watchers say the technology could help HP surpass competitors such as IBM and enable HP to deliver the broadest set of management, provisioning and automation capabilities today.

  • Share/Email
  • Tweet This
  • Comment
  • Print
Partner Content

Explore the Ultrium Edge

The powerful tape technology can address data security with tape encryption as well as long term data protection.

Find Out More

Disk and Tape Square Off

Discover what disk and tape really cost and which solution provides lower total cost of ownership and optimizes energy use for your organization

Download this White Paper

Don't Fall for the Myths

The Clipper Group explores the truth behind the myths of tape, digging into the misconceptions in the disk vs. tape debate.

Review this information

information examination

An examination of information security issues, methods and securing data with LTO-4 tape drive encryption

Read this analysis

Comment
Login
Forgot your account info?
Add comment
Anonymous comments subject to approval. Register here for member benefits.
Have a NetworkWorld account? Log in here. Register now for a free account.

Videos

rssRss Feed
Partner Content

Explore the Ultrium Edge

The powerful tape technology can address data security with tape encryption as well as long term data protection.

Find Out More

Disk and Tape Square Off

Discover what disk and tape really cost and which solution provides lower total cost of ownership and optimizes energy use for your organization

Download this White Paper

Don't Fall for the Myths

The Clipper Group explores the truth behind the myths of tape, digging into the misconceptions in the disk vs. tape debate.

Review this information

information examination

An examination of information security issues, methods and securing data with LTO-4 tape drive encryption

Read this analysis