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Mercury CEO: Customers welcome HP acquisition

07.08.2006
Tony Zingale arrived at Mercury Interactive Corp. in 2004 and took over as CEO after his predecessor and two other top executives were dismissed amid allegations related to stock- options irregularities. Even as Mercury continues to cooperate with an investigation by the U.S. Securities and Exchange Commission, it is in the midst of being acquired by Hewlett-Packard Co. Zingale spoke with Computerworld last week about the past year, the planned HP buyout and the coming integration of Mercury and HP's products.

What do you tell your customers who are worried that the SEC investigation is not over? The restatement is behind us. We've completed all the necessary work in and around restating 10 years of financial results. We recertified all the company's revenues and expenses, so that set of issues is behind us.

What have you and the company learned through this process? We've learned that you have to stay focused on running your business. A company needs good corporate governance, good processes, and you've got to have a great business to keep your executive team focused on. The situation I came into at Mercury was one of having a great product line and a great business, but unfortunately, I came into a set of issues beyond my control that I had to clean up. What I was after was sustaining the business and the growth that Mercury was capable of.

Are your biggest customers worried about what will happen to Mercury products after the HP deal closes? I met with five different major customers after the announcement last week, and they were all thrilled for several reasons. First, HP is a brand that's known and highly recognizable and very valued. Combine that with HP's reach, investment capability, continued investment in software through acquisitions and the US$4.5 billion acquisition of Mercury, and that was a big, big statement. Mercury is formidable in the business technology optimization realm, has testing prowess and IT governance capability. When you combine that with the richness and depth that HP has with IT service management and network management and OpenView products, you get pretty much an incomparable set in the market.

What is the future of Mercury testing tools, which account for 60 percent of Mercury's revenue? Yes, 60 percent is from testing, down from 80 percent in revenue from testing tools a year ago. It's still a thriving market, but we're moving more to applications management, IT governance and SOA governance. You always want to look through the windshield and see where the market opportunities are.

How much overlap is there between HP and Mercury products?Very little. There's certainly none in the testing realm, certainly very little in the IT governance realm and none in the SOA governance realm.