Mercury acquisition a major step up the value chain for HP: Butler Group

26 Jul 2006

HP has announced having signed a definitive agreement to purchase IT management software and services company, Mercury Interactive Corp, for approximately $4.5 billion. The acquisition is expected to establish HP''s portfolio of IT management software and services as the clear choice for companies seeking to optimise the value that IT brings to business.

According to Alan Rodger, research analyst with Europe''s leading independent IT research and advisory organisation, Butler Group, believes this is an important step up the value chain for HP. Rodger points out that even very recently, HP was mainly talking about IT transformation in terms that made HP seem a little remote from the real business issues that its customers wrestle with.

The Mercury acquisition is expected to increase the size of the HP Software business to more than $2 billion in annual revenue. It brings together the strength of HP OpenView systems, network and IT service management software with Mercury''s strength in application management, application delivery, IT governance and service-oriented architecture governance.

Pressures to shorten delivery timescales, and accommodate increasing volumes of change very quickly, are leading customers to see the whole IT lifecycle as a single process, rather than separate worlds of application development and live operation.

HP''s acquisition of Mercury can offer customers the capability to get to grips with issues around the business outputs from IT within the same framework as more technical IT delivery issues," says Rodger. "This has the potential to propel HP further beyond the data centre into customer organisations, and to tackle application performance, quality, portfolio management, governance, and other high-value IT management issues that directly affect organisations'' ability to deliver business value from IT," Rodger concludes.