HP Buying Opsware for $1.6B

 
 
By Chris Preimesberger  |  Posted 2007-07-23 Email Print this article Print
 
 
 
 
 
 
 

Hewlett-Packard will integrate Opsware's data center automation software into its portfolio of business technology optimization products.

Hewlett-Packard is buying Opsware, a software vendor best known as a provider of data center automation products, for $1.6 billion, the two companies announced July 23.

The purchase of Opsware and its line of products will allow HP to integrate that technology into its own burgeoning line of BTO (business technology optimization) software. Combining the technologies from both companies will allow for better IT automation in large, enterprise-class data centers, according to HP officials.
At a 2006 event, Mark Hurd, HP president and CEO, and Ann Livermore, executive vice president of the companys technology solutions group, discussed HPs growing interest in BTO, or automating and managing technology. Most of this work is now done by manual or custom fashion and HP is looking to change that by creating a fully automated suite of products to manage the data center.
HP made a step forward in this area when it bought Mercury Interactive for $5.4 billion in July 2006. HP has since been rolling out products based on that acquisition, including new software for quality assurance, load testing, IT service management, and change and configuration management. The addition of Opswares technology to the portfolio it acquired through the Mercury and Peregrine Systems purchases will help extend HPs software capabilities to automate an entire enterprise data center, from initially provisioning servers, networks and storage devices to managing changes and upgrading the infrastructure to meet government regulatory requirements. Click here to read more about HPs new management tools.
"The acquisition of Opsware is intended to enable HP Software to help our customers resolve one of their critical pain points: controlling the increasing complexity and cost of managing the data center," Thomas E. Hogan, senior vice president of HP Software, wrote in a statement accompanying the announcement. At its recent Technology Forum & Expo in June, HP executives talked about moving the company beyond its traditional roots as a hardware provider to offering more software suites, management tools and services. In her address at that show, Livermore talked about how HP needs to leverage all of its various products—hardware, storage, software and services—into a package for its customers that will address a number of concerns, including more efficient management of the data center. This new focus, coupled with the acquisition of high-end software offerings, is a signal that HP is getting ready to compete against similar management tools and services provided by IBM and other vendors. "I think what theyre [HP] looking for is a way to compete directly against, say, IBM Tivoli, and some of the other data center infrastructure management players," Charles King, an analyst with Pund-IT Research, told eWEEK. "HPs software strategy languished for a couple of years [under former CEO Carly Fiorina], whereas a lot of their competition moved forward aggressively ... They kind of stepped out of the middleware business and decided to pursue it entirely via partners. Instead, they focused more on the traditional printers business and more consumer-oriented products." Click here to read Eric Lunquists blog about HPs acquisition of Opsware. With Hurd at the helm, King said HP has had more focus and it is reflected in the companys strategic acquisitions of the last two years. "I think there was a bit a confusion at the company [under Fiorina]," King said. "They had adaptive enterprise, of course, but they also had the utility data center initiative going for a while that I havent heard too much of anything about. I think under Mark Hurd, they have moved forward much more aggressively and much more coherently with their software strategy." Opsware, Sunnyvale, Calif., was co-founded in 1999 by Netscape creator Marc Andreesen as Loudcloud, a provider of hosted enterprise software applications. The company then developed into a vendor for data center automation, compliance, virtualization and configuration management software. It now has about 350 customers. "HP is getting a lot of nice technologies [from Opsware]," Forrester analyst Galen Schreck told eWEEK. "Their server provisioning and configuration management technology has been growing and maturing, and getting better all the time. Thats all they do there." Schreck added that with the addition of Opsware, he would now put HP ahead of IBM Tivoli, from a competitiveness standpoint. "Opswares server provisioning and config management tool, I think, was better than either HPs or IBMs," he said. The Opsware acquisition comes on the same day that HP, in Palo Alto, Calif., announced that it would purchase Neoware, a provider of thin client devices. Click here to read more about HP buying Neoware. That move is expected to strengthen HPs infrastructure offerings from the hardware side by giving it access to Neowares line of Linux-based thin clients, which will add to the companys own line of thin-client and PC blade products, which are offered under HPs Consolidated Client Infrastructure platform. In addition, the purchase of Neoware, of King of Prussia, Pa., means that HP will now likely become the top vendor of thin client PCs. HP has been second behind Wyse Technology, while Neoware ranked third, according to analysts. The Opsware deal is expected to close in the fourth quarter of 2007. When the acquisition is complete, Opsware will become part of the HP Software business. At that time, HP will also appoint Ben Horowitz, the current CEO of Opsware, to lead the companys BTO organization. Check out eWEEK.coms for the latest news, views and analysis on servers, switches and networking protocols for the enterprise and small businesses.
 
 
 
 
Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz
 
 
 
 
 
 
 

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