HP/Mercury Acquisition: Commentary

Posted by Stefan Tilkov on Jul 28, 2006 10:30 AM

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In January, Mercury acquired Systinet, adding SOA products and expertise to their well-known testing tools and lesser known suite of products for "business technology optimization" (BTO), a term coined by Mercury to describe their approach on aligning IT with business needs. Mercury paid 105 million USD for Systinet.

The acquisition of Mercury by HP, in turn, is much larger — a $4.5 billion deal, with a nice 33 percent premium for Mercury shareholders. Obviously, HP is interested not only in Systinet's products, but in the BTO and testing tools as well. Anne Thomas Manes, Research Director with Burton Group, told InfoQ she believes the Mercury product set fills a pretty big gap in the HP product portfolio, and there's not too much overlap. But she also had some concerns: "HP is not known for incorporating software acquisitions especially well. HP has hundreds of overlapping products that don't work together very well. Mercury has the same problem," she said. In her opinion, the Systinet division's platform is still the best SOA governance solution available.

Among those who will probably not agree with this statement are two of Systinet's competitors: Infravio and Software AG. "HP, Mercury and Systinet provide a strong solution for governance, but is weighted heavily towards centralized IT and control of IT systems," said InfoQ SOA editor Miko Matsumura, who also happens to be VP of Technology Standards at Infravio. "As an independent vendor of SOA Governance Registry Repository, Infravio's solution becomes even more important for enabling federated organizations to achieve business agility."

Software AG's Ivo Totev, Vice President, Product Marketing crossvision believes there are only two globally available SOA management and governance solutions: Systinet and CentraSite from Software AG and Fujitsu. "Our customers want choice — that's why we sincerely hope the repeated acquisitions of Systinet will not have negative impact," Totev said.

Systinet not only provides a registry/repository solution, but also a very advanced Web services stack for both Java and C++. It will also be interesting what will become of these under the new stewardship.

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   Ironic

   Jul 28, 2006 1:04 PM by John Harby

   This is an interesting roundabout for HP since they actually invented web services in the first place (Rajiv Gupta, e-speak, etc.)

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   Phil Windley's point of view

   Jul 31, 2006 12:22 PM by miko matsumura

   In her (Anne Thomas Manes)opinion, the Systinet division's platform is still the best SOA governance solution available.

   Then again, according to InfoWorld Labs, Infravio's product scores more highly than Systinet. Links to both reviews by Phil Windley, the Infoworlds Labs reviewer are available in this commentary about the HP/Mercury acquisition: http://blogs.zdnet.com/BTL/?p=3379 Full disclosure, I'm an employee of Infravio. Miko

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   Will this assist them in the quest to deliver value?

   Aug 1, 2006 11:59 AM by Frank Cohen

   I followed Mercury for the past 5 years, since founding PushToTest. At first I thought Mercury was the 800 pound guerilla in the room... poised to squash my test automation company. Mercury invited me in to learn about what I had in mind in the test automation tools space. I have experience with Microsoft and was weary that the invitation would be a chance for Mercury to duplicate my ideas in their products. What I found at Mercury - and confirmed in subsequent meetings and one consulting engagement - was a group of hard-core technologists looking for ways they could move up the value chain for their enterprise customers. For example, I found through my PushToTest experience that providing test tools for developers and QA technicians is important because they are the key recommenders within an enterprise. But they also lack budget-spending authority. The real money is with the CIO's operating information systems and VP Engineering for quality testing. The CIOs are driven by a need for governance - a code word for control. They are fear-driven to need control over all the application development, XML, and database work going on in their datacenters. Delivering governance is key to tapping into enterprise IT budgets. I know very little about HP's governance offerings. Yet, I do know that HP more or less invented Web Services and then gave up on it. It seems to me that Mercury's investments to know SOA, Web Services, and to deliver solutions for CIOs and VP Engineering users is a big "plus" for HP's governance offerings. -Frank Cohen http://www.pushtotest.com http://www.xquerynow.com

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   Re: Will this assist them in the quest to deliver value?

   Aug 1, 2006 3:34 PM by Eric Roch

   Here is another view specific to SOA management. http://blogs.ittoolbox.com/eai/business/archives/what-the-hp-acquisition-of-mercury-means-to-soa-management-10739

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