The buyout will add a variety of potentially useful application and performance management products to the OpenView portfolio, several HP users said. Buying Mercury should also boost HP's ability to compete with IBM, BMC Software Inc. and CA Inc. in the management tools market, according to the HP users and some industry analysts.
Mercury's products will complement or even enhance the OpenView tools for ensuring system performance and availability and managing internal processes based on the IT Infrastructure Library specifications, said Karen Semonson, information systems operational services manager at Foremost Farms USA Cooperative in Baraboo, Wis.
For example, she wants to use Mercury's IT Governance Center and IT Availability Center tools to broaden the IT service management road map at Foremost Farms. Those products should add capabilities that HP's OpenView Service Desk and OpenView Operations tools don't provide now, said Semonson, who is co-leader of the Wisconsin User Group. Her group is a local chapter of OpenView Forum International, an independent organization with more than 6,000 members.
Joe Gersch, the OVFI's treasurer, said HP users had been discussing the prospect of a Mercury acquisition for months. "As I've talked to OV users, they say Mercury has a very good suite of products, and some actually said, 'I wish Mercury were a part of OV,'?" noted Gersch, who is vice president of engineering at Secure64 Software Corp. in Greenwood Village, Colo.
'Strong complement'
Gersch added that he thinks Mercury's tools are, in general, "a pretty strong complement, with just a little bit of overlap" with OpenView.
Mike Aubert, co-leader of OVFI's Colorado chapter, said HP already has some application and performance management tools that provide the same kind of functionality offered by Mercury. "But I'm sure HP can incorporate the [new] tools," added Aubert, who declined to identify the company he works for.
HP CEO Mark Hurd said during a teleconference that the purchase of Mountain View, Calif.-based Mercury will double his company's software revenue to more than $2 billion annually and is designed to make HP "an end-to-end leader in IT management."
Rick Langsford, an OVFI member and former leader of its San Francisco Bay area chapter, said that after Hurd took over at HP last year, some users were worried that he would de-emphasize the OpenView business.
"But it turns out that there's been a software emphasis, and in fact, they are being very aggressive" with acquisitions, said Langsford. He is director of research and development at Pepperweed Consulting LLC, an Indianapolis-based company that does OpenView systems integration work.
Haw Wu, an analyst at American Technology Research Inc. in Greenwich, Conn., said the synergies between Mercury's products and OpenView "are not as clear" as HP implied. More than 60 percent of Mercury's revenue comes from software development and testing tools, with about 30 percent from application management and just 10 percent from IT governance and resource management, Wu said.
A drop-off in the value of Mercury's stock, which followed the departures of three top executives last year over a stock-option scandal, "produced an opportunity that HP pounced upon," said Zeus Kerravala, an analyst at Yankee Group Research Inc. in Boston.
Nonetheless, Kerravala described the HP and Mercury product sets as a good match. "HP is good at systems and network management but weak in anything application-oriented," he said.