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July 25, 2006
HP Gets Mercury
Yow, HP buys Mercury Interactive for $4.5-billion. It's certainly ballsy, and the first post-ESOP scandal deal, but I read this more as a reflection of how crummy the enterprise hardware business remains. Why else would post-Agilent HP end up back into test and development (even if in software)?As an aside, just now an analyst on Bloomberg TV said he'd been hearing about this for a while "in channel checks". I call Bullshit. Why didn't he write about it then, as opposed to only claiming knowledge now?
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Enterprise lifecycle and systems management is a huge deal for HP. They are lagging in that space and it is a major right of passage if you are going to swing with the big boys in enterprise accounts. This was a good acquisition IMO. I am waiting on Hurd to pull the trigger on a big one sometime. I expect some type of relationship or merger with a major consultign firm beyond the historical ties. He's sucking wind in BPO, outsourcing, offshoring, etc comparatively. That pie is too large not to be more aggressively engaged in. But, I expect he wants to focus on the blocking and tackling first.
You are right. The enterprise hardware business is absolutely awful and there appears to be nothing significant on the horizon to change it. It has become a game of attrition or a zero sum game, however one chooses to view it. The major players are like pirhana surrounding a kill. The new opportunities are few and far between so they are jumping all over each other to replace their competitor at the next refresh cycle. Those are long sell cycle, low odds deals which make life for the enterprise sales teams less than thrilling. The next big thing is still a few years off.









Atta boy, Paul. I always wonder when I read that "channel check" crapola after the fact too.
Mathew