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HP Acquisition Day: Opsware and Neoware – And the Larger Issue of HP IT Management Offerings

Four years ago we spent 70% of our R&D dollars on hardware, but last year that 70% was dedicated to software. —Mark Hurd, CEO, HP

HP is on the path to acquiring two more companies today: Opsware and Neoware. I don’t have a well reasoned analysis at the moment for you, but here are some off-the-cuff thoughts:

  • If Opsware’s Run Book Automation (not just monitoring, but actually doing stuff with IT) works as well as Opsware’s recent growth and The Hype would seem to indicate, strapping together HP’s existing IT management assets along with Opsware under the OpenView brand would be might powerful marketing. OpenView is still a good brand name, though, perhaps, an aged technology. Using Opsware and other recent acquisitions to pull a product line refresh, a la BMC PATROL-to-BMC Performance Manager could be both technologically and market wise successful. We’ll see.
  • Us IT Management wonks are always talking about how HP is getting serious about software, that is, IT management software. Software has always been the odd man out at HP, but obviously HP is spending to change that: Mercury, today’s two, and others.
  • The M&A speculation fun-hogs among us like to throw in pereinial favorite BMC, but there are other, sort of “second tier” IT management companies as well.
  • Virtualization – HP has done work to create The Problem of Virtualization (“like bacteria in a petri dish”), perhaps this is now The Solution that you, with The Problem, can buy.
  • Not knowing Neoware well at all, the first thing I think of is comparing Microsoft Softricity’s “application virtualization” to it. Sure, it’s not the same technologically (from what I know of Neoware), but the end result could be the same…?
  • I hadn’t thought about it ’till know, but the question of SunRays comes up here as well. The problem there was (the perception) of having to buy Sun hardware, but it seems like if the “application virtualization” idea takes off, Sun could profit from some after-glow marketing quite well if phrased right.
  • Special mention goes to the city Neoware is based in: “King of Prussia.” Whao!

The Wider Angle

The big picture here is HP building up a complete, refreshed IT management product line. Clearly, HP is going for the Big 4 dream of providing an ITIL implementation, which is fine and good, really. Until a black swan comes along and changes the agenda from ITIL, I’m sure there’ll be plenty of market for that message.


There are some missing items from what I know of HP’s IT management strategy, however:

  • Open source – I’m not sure if HP’s feelings about open source in IT management are out in the open yet. Several months ago, at an HP event, Steve said:

    Nowhere, interestingly, as one of the Forrester analysts and I discussed earlier today, did they utter the words “open source.” Not once that I caught. Nor, as you might deduce from that omission, the word “developer.”

    (Form HP software exec, Nora Denzel’s interviews with Investor Business Daily and Dave Rosenberg are interesting, tangential background data-points.)

  • SaaS – both when it comes to providing IT management as a service (a la FiveRuns, Klir,, and friends), but, more importantly, providing the tools for managing SaaS installs (the latest addition here being eVapt with others skirting around that I need to look more into). I had a brief moment of excitement when I read Opsware as Opsource.

The open source hole looms larger in my mind than the SaaS one. While I think providing IT management as a service is something that the Big 4 will be slow to reap the benefits of (based on my past experience at BMC and on my current read of the Big 4’s SaaS ambitions), providing IT management for SaaS is more of a medium- to long-term bet that the Big 4 could, if they found themselves in a sudden pinch of successful companies, acquire to fill out the bullet point.

Open source in IT management, on the other hand, is looking to be a Big Deal in the next year or so. Figuring out how to incorporate open source into an existing, closed source company without getting revenue jitters isn’t as easy as acquiring a bullet point: it’s wider, deeper change that requires planning and, more importantly, time for successful culture change.

So, the afore mentioned “IT wonks” will no doubt be watching HP more. We’ll be seeing what OpenView 2.0, so to speak, looks like.

I like Jason’s good round-up as well.

Disclaimer: FiveRuns, Sun, and fellow Big 4 members BMC, CA, and IBM are clients. I’m friends with one of the founders of eVapt.

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Categories: Enterprise Software, Marketing, Open Source, Systems Management.

Comment Feed

6 Responses

  1. Cote, thanks for the mention. Your writeup helped crystallize things from a perspective I hadn't thought much about; good stuff.



  2. Nice analysis Cote 🙂

  3. Jason & Jon: thanks, I'm glad you liked it 😉

  4. Agree with the open source comment on HP. Still trying to figure out why did HP buy knightsbridge ??

    Not that it has any major offering there from a software standpoint. I guess there is a remote chance of selling storage and servers but I dont think you sell that way

Continuing the Discussion

  1. […] already has a developer story through Mercury. But lacks in open source. IBM through WebSphere and Rational. CA- well, that’s a good […]

  2. […] community for developers and open sourcing more of it’s own software. As has been noted, and as with HP, sure, BMC uses and participates in open source, but as of yet they haven’t committed much […]