HP in the rumor mill again; this time for Mercury buy

By Denise Dubie, NetworkWorld.com, 05/04/06

According to one tipster at Interop and a report in an online Israeli publication, HP is in the process of acquiring Mercury Interactive. Both companies declined to comment on the speculation.

Industry watchers have long pondered which vendor might have enough money to pick up Mercury, especially since the company experienced a management exodus in the wake of accounting scandals. And with management rivals BMC, CA, HP and IBM in a constant competition to outdo each other with technology buys, the deal seems a likely step for HP.

"The [potential] deal, from a product standpoint, makes a lot sense on multiple fronts: [Mercury's] product portfolio, existing integrations with Peregrine, low development costs in Israel, and the sales channels Mercury has developed are key value propositions," said Stephen Elliot, a senior analyst with IDC, when asked if such a deal could benefit HP. "[Mercury] also owns the testing market -- an added plus for HP as it competes against IBM. [Mercury] also has Systinet, a very good service registry technology."

Jasmine Noel, principal analyst at Ptak, Noel & Associates, agrees such a deal would not be out of the question and could put HP in a positive position.

"If you look at it the next most obvious IT management place for HP to fill out was in higher level IT governance reporting and project/resource analysis. Also if you look at some of HP last acquisitions they have been companies with lots of customers -- Novadigm, Peregrine," she says. "Add those two things together and you get Mercury. The fact that Mercury is an 800-pound testing gorilla would be a bonus -- making HP software group a larger percentage of total HP revenue -- thereby keeping the talk that HP is not and never will be serious about software to a dull roar, while not upsetting partners like Oracle and BEA."

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