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HP-Mercury deal sweetens systems management

Although the short-term impact of HP's recent acquisition of Mercury is uncertain, some analysts say that users will in the long term have a more robust management system.

When HP last week won a bidding war to purchase Mercury Interactive for $4.5 billion, industry analysts across the board said the deal would boost HP's competitive edge in the IT governance and systems management spaces.

HP's Web site said the acquisition combines the strength of HP OpenView systems and network and IT service management software with Mercury's strength in application management, application delivery, IT governance, and service-oriented architecture (SOA) governance. Though it's unclear when the two vendors' products will be bundled together, HP said the deal is designed to give users a robust suite to optimize, automate and align IT services with business needs.

That is good news for network operators and CIOs, who were looking to fill holes in HP OpenView's systems management portfolio.

IDC analyst Stephen Elliot said that buying Mercury adds to HP's offerings new levels of application development and testing, product portfolio management, SOA registry, and an application management portfolio.

"From a [user] standpoint, I think it offers a broader perspective on a management strategy, both tactical and strategic," Elliot said. "These are mostly areas HP doesn't have."

The deal can start bridging the gap between development and operation teams, he continued.

"If you're using OpenView, you're really on the operations side -- in the trenches looking at network management, service desk and change management," Elliot said. "The challenge for both customer sets is: How do you attach projects to the product portfolio? The impact is really along the lines of adding project ownership."

According to Forrester Research analyst Carey Schwaber, companies currently using Mercury's testing tools may not see an immediate benefit to the pairing because to them "it's not clear what HP really does."

"For the people using [Mercury's] testing tools, it's confusing," Schwaber said, because they're not familiar with OpenView. "At first, people are trying to figure out what it means. There will be minimal impact in the short term."

But Enterprise Management Associates analyst Dennis Drogseth said the acquisition could be signaling the end to siloed management approaches.

"The siloed approach to buying management solutions, those are becoming more and more a thing of the past," he said. "It will be good for users to have options for more integration."

Drogseth added that right now companies on both the HP and Mercury sides are in a holding pattern, waiting to see what the next move is.

"If you're a Mercury customer and you don't have a significant investment in OpenView, you'll want to understand HP's plans," he said. "I think it will be confusing, and customers will need to wait out the next couple of months."

In the long term, however, the acquisition could be advantageous for users, Drogseth believes.

"The pluses are somewhat obvious -- richer application management, huge new capabilities in lifestyle applications management," he said. "These are very important and let companies support efforts in Web Services."

It also gives Mercury customers a more unified approach to managing application services, Drogseth said, adding that "you can't manage them in a vacuum."

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According to HP's announcement, the purchase will "establish HP's portfolio of IT management software and services as the clear choice for companies seeking to optimize the value that IT brings to business." The pairing, Schwaber said, will continue the trend of integrating testing and management software.

Schwaber said that the deal broadens HP OpenView software to include more robust systems and application management tools. It will also add application and performance management tools into OpenView.

Where the acquisition may fall short for users, according to Schwaber, is in the application development space. Testing is just one part of the application development lifecycle, she said, and users typically want a solution that manages and tests application performance from development to deployment. The HP-Mercury deal is somewhat worrisome, she said, since it is unclear whether Mercury's application development tools will retain the functionality users have come to expect.

Overall, however, the deal could eventually benefit companies looking to boost their management capabilities, Elliot said.

"At the end of the day, we're talking about two pretty strong brands -- HP and Mercury," he said. "It offers users an opportunity to think outside the box across technology and process maturity. If you think strategically, it can really bring some efficiency from a process standpoint, cost savings and a chance to simplify processes."

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