HP puts Neoview out of its misery

Rumors of Neoview’s death are no longer exaggerated. It was revealed this week that HP has decided to pull the plug on support for its data warehousing system by 2014. Speculation got louder after last week’s announcement that HP was partnering with Microsoft to release a $2 million data warehouse appliance built around SQL Server.

The problem was that Neoview never really fit in at HP. It wasn’t the timing – when HP announced the product in 2007, it was during a period when the economy was still booming, and more importantly, technology advancement placed Big Data and in-memory Fast Data into affordability beyond the Global 2000. In the past decade, a number of startups have emerged, offering advanced analytic databases, giving Teradata and Sybase IQ new competition.

Until ascension of Leo Apotheker, there were few people that understood the software business, and even fewer that really understood enterprise software. HP’s existing software business, which surprisingly doubled under Mark Hurd’s watch, remains a modest 3% of revenues. The good news is in the last few years, HP has made software a business — software is no longer an oxymoron over there. But the kind of software that HP sells is primarily infrastructure and geek-oriented: IT infrastructure and service management, application lifecycle management, and telecom network node management. Try to figure the synergy with business analytics and analytics.

Neoview itself was software that HP ended up with and half-heartedly (if that) tried to market. Originating as the NonStop SQL database of the former Tandem Computers fault tolerant midrange platform, the technology came to HP through Compaq’s 1997 acquisition of Tandem, and the subsequent HP acquisition of Compaq in 2002.

Ironically, HP’s cutting the cord on Neoview actually gives Apotheker a fresh chance to re-energize this side of the HP software business. There are numerous rising analytic database players out there; beyond Netezza, which was acquired by IBM; Greenplum, which was swooped up by EMC; and Sybase, which is now part of SAP, you have many upstarts that could provide HP golden opportunities to do more SQL Server like deals on terms that would likely be far more favorable to HP, while providing dress rehearsals for eventual acquisition.

The trick of course is that HP has to decide what it wants to be under the new Apotheker regime. Under Hurd, the mantra was converged infrastructure, which drove the Palm, 3Com, and 3PAR deals. So at this point, HP has some major digestion on its plate before looking for more big deals. We’ve speculated previously about the types of deals that Apotheker could do to push HP up the enterprise software food chain. But we’d suggest that HP take a deep breath: partner, staff up, and get to know this business first rather than repeat the same mistake twice.