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HP closes Mercury deal

Mercury's management software added to the HP portfolio, while IBM launches promotion to win over HP clients.

Dawn Kawamoto Former Staff writer, CNET News
Dawn Kawamoto covered enterprise security and financial news relating to technology for CNET News.
Dawn Kawamoto
2 min read
Hewlett-Packard on Tuesday announced the completion of its merger with management software company Mercury Interactive, setting the stage for a revamped HP Software suite and renewed competition with IBM's software products.

HP, which two years ago increased its presence in the software market by offering new products and expanding its partner program with third-party software companies, is trying to reinvigorate its software strategy again with the $4.5 billion acquisition of Mercury. The deal will provide HP with Mercury's technology for managing applications development, while bolstering the company's OpenView management suite and network management offerings for data centers.

HP plans to delve into the details of its OpenView products and post-merger strategy next month during its HP Software Universe conference in Vienna, Austria, said Deborah Traub, vice president of OpenView Products.

Traub, along with Yuval Scarlat, a Mercury senior vice president of applications and product development, noted that because there is little overlap between the OpenView and Mercury product lines, there is relatively little integrating to do. HP plans to retain all the major brand names associated with each line, including OpenView, the executives said. Those brand names will reside under the HP Software umbrella.

IBM hardly idle
As HP sets the stage to revamp its software lineup, IBM has been preparing to exploit the situation.

IBM on Tuesday unveiled its HP-to-IBM migration promotion. IBM is offering Mercury and OpenView customers discounts of up to 25 percent on select Rational and Tivoli software if they switch out of HP and over to Big Blue.

"IBM is concerned with (the merger), and rightfully so," Scarlat said.

HP's software efforts, however, have not always gone smoothly. In 2002, HP abandoned its efforts in the e-commerce software market, despite having spent $470 million to acquire Bluestone Software.

Traub contends software products are strategically important to HP, as evidenced by the $4.5 billion "check" the company wrote to acquire Mercury. She added that the success of the deal hinges on execution of the merger, rather than on proving whether the products fit together.

HP is also involving HP Labs in its software efforts. HP Labs on Tuesday announced a research collaboration agreement with enterprise applications giant SAP. The Adaptive SAP project will focus on making the companies' hardware and software work in unison to operate as efficiently as possible, adjusting quickly to the customer's workload and to any changes in the customer's business processes.