Some of our acquisitions in the past have been very, very successful, but yes it is fair to say we have made a couple of mistakes, Isherwood – full title vice president and general manager HP Software, EMEA – told us.
He argued that HP’s smaller acquisitions in identity management and change and configuration management, as well as the larger buys of Compaq and Peregrine Systems, were successful. Its acquisition of application server vendor Bluestone is the best example of one of its botched acquisitions – it quickly gave up on the technology and resorted to a partnership with BEA.
Explaining why some acquisitions have failed in the past, Isherwood said: Some companies had good technology but not a good go to market capability. That can take a long time to build. We’re human, to be honest. Some have also not been the right acquisitions, but we have learned a lot from large acquisitions like Compaq.
You could argue that Compaq was not the right acquisition but in fact we made it hugely successful, Isherwood continued. Today we have industry standard server global market share in the region of 50%, and if we hadn’t bought Compaq we would have 10% or less.
Isherwood argued that unlike some of the firms it bought in the past, Mercury does not have go to market challenges so the acquisition should be easier to make a success, assuming the deal closes later in the year – as we went to press it was reported that HP had failed to begin its tender offer for Mercury’s shares on schedule, but insisted the delay won’t hold up the completion of the merger.
Isherwood reiterated that the acquisition will take its enterprise software business from around $1.4bn a year in revenue to closer to $2bn, and said that it gave it the market leading testing tools company as well as strength in what Mercury calls Business Technology Optimization (BTO) and IT governance.
He said it was too early to talk about the specifics of integration between HP’s OpenView systems management products and Mercury’s portfolio, but said that another benefit of the deal is that the overlap between the two portfolios is pretty non-existent.
He also said it was also too early to say how much of Mercury’s branding will be retained after completion of the merger, but did say that, Their BTO message was very strong, I see no reason why the BTO message would not be kept.
