HP?s Software Strategy Begins to Take Flight

April 30, 2006

HP?s Software Strategy Begins to Take Flight

HP?s Software Strategy Begins to Take Flight
By Judith Hurwitz, CEO

Under the new leadership of Mark Hurd, a cogent strategy is beginning to emerge for Hewlett Packard.  Hurd has made it clear that software is one of the most important pillars of HP?s strategy, and as an example of his commitment to growing the software business Hurd recently brought on Tom Hogan, an IBM veteran who was most recently CEO of Vignette. 

HP?s software strategy is focused on four areas:

  • Infrastructure optimization
  • IT Process Automation
  • IT Service Management
  • Business Alignment

Each of these areas has a variety of solutions focused around ensuring that emerging data centers can be managed proactively. The foundation of this software strategy has its roots in OpenView as a systems and network management platform and is intended to help HP build a strategic software platform. 

HP has long had a love/hate relationship with software for a long time.  It is not as though HP is new to software. It has developed, bought and sold more software companies than we can possibly remember.  However, as is the case for many companies that started life in the hardware world, the transition to software is often complicated and uncomfortable.  Over the past two years, HP has started to move in a consistent direction with its software strategy.  Its acquisitions over the past three years have demonstrated that the company has put a strong stake in the ground for infrastructure software related to manageability.  In understanding HP?s direction, it is useful to understand what companies HP has bought and how they fit into the product offerings listed above.

  • Novadigm., purchased in 2004, provides software to implement policy-based change and configuration management
  • Consera, also purchased in 2004, provides IT service-modeling software to help customers to automate IT management tasks
  • Baltimore Technologies? SelectAccess was purchased in 2003 and is the foundation for HP?s federated identity management offerings.  It supports role-based authorization to network resources.
  • TrueLogica was acquired in 2004, another company specializing in Identity Management. TruLogica provides tools for building a model that attaches all the applications and business processes associated with specific groups of employees.
  • Trusgenix, another identity management vendor was acquired in 2005.
  • Talking Blocks, acquired in 2003, builds SOA-based management services. 
  • In 2003, HP purchased Persist Technologies Inc. which focused on the information lifecycle management (ILM) area. The software is designed for long-term storage and access of reference information.
  • AppIQ was purchased in 2005 to provide HP with Storage Area network (SAN) management capabilities. 
  • Also in 2005, HP acquired Peregrine which is focused on asset management software.
  • In 2006, HP bought OuterBay, an ILM solution that helps customers monitor, forecast, and manage data growth.

These acquisitions are all key foundational pieces in a strategy that calls for HP to establish itself as a leader in data center management.  Indeed, HP is putting all of its focus on manageability in a heterogeneous data center environment.  Unlike some of its infrastructure competitors, HP does not intend to become a middleware vendor.  HP tried that route in the late 1990s with its acquisition of Bluestone Software which it later decided to abandon.  Ironically, at this stage not having a middleware stack may turn out to provide a differentiation for HP in the market.  With the advent of Service Oriented Architectures (SOA), the ability to manage any middleware stack will provide an interesting market opportunity for HP.

With a new software chief on board, we expect more acquisitions to follow.  Hogan?s vision for HP software is clear: he intends to take the organization to the next level by investing in software aimed at leadership in infrastructure management.  It is clear to him that HP will not be able to achieve this leadership by growing organically.  Therefore, we expect that HP will acquire some high profile software companies as a way to increase growth. 

Here are our predictions for HP?s software business:

  • HP will make several very big acquisitions of important software players. These will be software companies that are focused on infrastructure for service oriented architectures.
  • Data will be a new area of focus for HP software.  While HP has not had its own database software we expect that HP will make acquisitions in software companies focused on the management of data across database platforms.
  • The software organization will begin partnering more closely with HP?s consulting organization by creating bundles of software for specific vertical markets where HP has strength including telecommunications, manufacturing, and financial services. 

We believe that HP will follow IBM?s lead and create a separate brand around HP Software. If HP can stick to its plan, they have a very good chance of being successful.


Newsletters 2006
About Judith Hurwitz

Judith Hurwitz is an author, speaker and business technology consultant with decades of experience.

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