iPhone 14 Pro vs. Galaxy S22 Ultra HP Pavilion Plus Planet Crossword Pixel Watch Apple Watch Ultra AirPods Pro 2 iPhone 14 Pro Camera Best Android Phones
Want CNET to notify you of price drops and the latest stories?
No, thank you

Management software key to HP plans

Hewlett-Packard's planned acquisition of Compaq casts the spotlight on a piece of management software used to administer everything from phone networks to storage systems.

Hewlett-Packard's planned acquisition of Compaq Computer has cast the spotlight on a drab but increasingly important--and profitable--piece of management software used to administer everything from phone networks to storage systems.

OpenView, HP's banner product in the $20 billion management software market, already ties together disparate products from HP's product line. New enhancements mean it can be extended to Compaq products, better joining the two companies' product lines and letting OpenView piggyback on Compaq's heavy presence in the Windows server market.

In a recent memo on HP's planned acquisition, Compaq Chief Executive Michael Capellas singled out OpenView as a "vital part" of the company's plans, filling a major gap in Compaq's ability to tie together all the components of a large customer's computing infrastructure.

OpenView, with innumerable "building blocks" that can work separately or together, has grown to span a wide part of the computing infrastructure since its first components were introduced 12 years ago. It can monitor performance and log users of database software, recognize when new devices join a network, create a map showing how all those devices are connected, and automatically create performance statistics. Plug-ins let the software take automated actions with software from Microsoft, BEA, Ariba, Intershop and others.

People pay little attention to management software, but they would take notice if it vanished, said IDC analyst Paul Mason.

"Hardware is always sexier than software," he said. "Software is something you can't see. Even worse, management software is stuck being used by the trolls in the basement" who administer computer networks.

"But these are the people that make the world run," Mason said. "If BMC, CA and Tivoli products stopped working, the world of commerce would collapse tomorrow."

Part of the reason Compaq likes OpenView is that it's designed to manage non-HP computers, added Brenda Peffer, HP's worldwide marketing manager for OpenView. About half of OpenView's revenue comes from managing non-HP computing systems, she said.

But joining OpenView with Compaq's market share could mean some awkward changes.

"Certainly it can't hurt to have the huge base of Compaq's (Windows) server business," Mason said. But integrating OpenView into Compaq operations will mean a "tricky transition" from encouraging all management software companies to support Compaq hardware to giving OpenView top billing, Mason said, alluding to Compaq's experience acquiring Digital Equipment.

"When Digital was in its mode of burning the furniture, they got rid of all the software businesses," he said. "By the time they were bought by Compaq, there was nothing left.

"Compaq has never been a company that has spent any time in the software business, so the company has had to be completely agnostic. It's had to encourage all the management software companies to get their products running on their hardware."

Another area where OpenView could progress is in widening HP's storage software plans to enfold Compaq's strong position in midrange storage systems.

OpenView is a key part of HP's Federated Storage Area Management (FSAM) plan, which HP hopes will be able to unite storage systems into one large pool. The goal is "increase storage tenfold with the same IT (information technology) staff," Peffer said.

Management software is a key part of HP's product line and the industry in general. HP elevated OpenView to one of its two major software thrusts, the other being its e-commerce NetActions suite.

HP is third in revenue market share after Computer Associates International's Unicenter and IBM's Tivoli, Mason said. BMC's Patrol also is a competitor.

Management software sales were about $20 billion last year, Mason said, and for HP "it is a business that is very profitable." OpenView sales tend to generate business from HP's services group, which can help customers build systems that are joined and managed by OpenView and can use OpenView when running outsourced customer computing operations.

HP has thousands of OpenView employees, and the company expects that strong growth in the first half of its fiscal year, which began in November, will compensate for the 6 percent drop in OpenView revenue during the quarter ended July 31. Overall revenue growth will be better than 10 percent for the current fiscal year, Peffer said.

"We've been growing very fast through the first half of the year. We're definitely seeing a slowing of the economy...but on the whole, we will still attain double-digit growth," she said.

Peffer said OpenView has been gaining at the expense of competitors. HP has had "easy pickings...being able to capture business from competitors," she said, largely because other companies have emphasized a "framework" rather than OpenView's "building block" approach, meaning that customers have to install one large piece of software into which modules fit instead of having independent components. HP also has succeeded because it has stayed away from software for older mainframe servers that are more central to CA, IBM and BMC.

While supporting mainframes may not seem "forward thinking," the customers who buy them have large information technology budgets, Mason countered. And mainframe revenue has held up more steadily in the current downturn than newer Unix and Windows servers.

And the building-block/framework debate isn't as big an issue as HP makes it out to be, Mason added. CA Unicenter and, to a lesser extent, IBM Tivoli have been moving to a building-block approach, he said.