Business Management

HPE clears decks with Micro Focus software merger

Writing this from near London, please forgive the parochial note but the local angle on Hewlett Packard Enterprise’s merger with Micro Focus is that this, coming on top of Softbank buying ARM, is another chapter in the long tale of plucky Brits attempting to be successful in a business software market dominated by the US. If the sale of chip designer ARM was taken badly then Micro Focus effectively taking charge of a new software arsenal might be cause for some patriotic cheers, bucking the eternal trend, as it does, whereby UK firms rise and are promptly chomped by larger concerns.

As with so much recent M&A news (see Dell-EMC, for example) the story is far from simple so pay attention please. Hewlett Packard last year split into HP Inc. (mostly printers and PCs) and Hewlett Packard Enterprise (or HPE and mostly servers, enterprise software and services) in order to release shareholder value. Earlier this year, CSC merged with the Enterprise Services, part of HPE, and even the wording of the HPE-Micro Focus statement seems to follow the same template. Again, as with CSC, the new software entity will be led by the new partner’s CEO. HPE will retain some software assets and double-down on Big Data analytics, security, cloud, and softare-defined infrastructure.

The old HP tried and tried for years to challenge IBM as IT’s great all-rounder but its record in mergers and acquisitions was not outstanding. Autonomy was a disastrous deal leading to vast write-downs and legal spats while Palm was also a dud. Going much further back, Compaq was more variegated but could hardly be called a coup. With its CSC and Micro Focus manoeuvrings, HPE today seems to be clearing the decks.

For Micro Focus there is the chance to complete its reinvention from grizzled mainframe veteran to broader infrastructure player. The company has been on a spending spree of its own in recent years, picking up Attachmate and application lifecycle management firm Serena Software along the way. Now it can add once feted brands like Autonomy and Mercury Interactive to its roster and be referred to in the same bracket as UK software’s beacon of success, Sage.

As for HPE, having refocused again CEO Meg Whitman will be under pressure to deliver that most elusive of road maps - a path to growth.


Also read:

Unpredictable Softbank chances it ARM

Sliced-up new Dell chases IBM

HPE-CSC deal is all about scale


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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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