| HP Offers to Buy Opsware | | Print | |
| Sunday, 22 July 2007 | |
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Seeking to broaden its footprint and support for ITIL (IT Infrastructure Libraries), HP has made a $1.6 billion offer for Opsware. Should the deal close, it would bring IT infrastructure change management and run book automation tools that are currently lacking in HP’s existing infrastructure management products, previously branded as OpenView.
Co-founded by Mark Andreesen as Loudcloud back in 1999, three years later the company changed its business from a managed service provider, refocusing on selling the data center automation tooling that it had originally developed for the initial business. Specifically, Opsware’s offerings manage change in the data center, with tools that track operating configurations of servers, networks, and storage. While it originally developed the server product internally, the other pieces came through acquisitions and are still in the process of being fully integrated. It has scored some coups along the way, including a resale agreement with Cisco, which OEMs and resells Opsware’s network automation product. And just last year, Opsware acquired iConclude, a provider of run book automation tools that help data center administrators automate workflows based on policies. Although Opsware has never recorded a profit, the $100 million company shaved losses to just $1.7 million by the last quarter of fiscal 2007, and was giving guidance that it would soon break into the black. Traditionally, Opsware’s data center automation tools ran alongside traditional systems management frameworks from HP, CA and others. In acquiring Opsware, HP would fill a gap by adding change management to its line, which largely monitors IT infrastructure. It would also work closely with HP’s Service Desk, which is used for managing trouble tickets, and with HP’s recently introduced Configuration Management Database (CMDB), an ITIL-inspired product that acts as the system of record for IT infrastructure configurations. Given that the deal has yet to close, HP could not disclose product plans. But it did state that it would retain the bulk of Opsware’s staff. That included CEO Ben Horowitz, who would be put in charge of HP’s Business Technology Optimization group, which directs product strategy for the original OpenView line. The proposed deal would be HP’s third largest, after the $25 billion acquisition of Compaq and last year’s $4.5 billion acquisition of Mercury. The significance of the deal is that it further bulks up HP’s Software business, which has received new backing under current CEO Mark Hurd’s watch. Demonstrating that it is now a strategic business for HP, the company is now breaking out revenue figures for software separately. Back in March, it disclosed that the unit made 8.5% profits and grew over 80% last year, counting the Mercury acquisition. In turn, naming Opsware’s Horowitz to a key role would be consistent with HP’s previous strategy during the Mercury deal, where it retained key executives to run HP Software’s product strategy. HP expects the deal to close by the end of its fourth quarter, which would be October 31.             |
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