SWOT Analysis: HP Software, Q2 2007

A few years ago, as HP OpenView became a profitable proposition within HP for the first time, it embarked on two major acquisitions that redefined the IT management software landscape. HP Software — the combination of HP OpenView and Mercury — seems to be ideally suited to providing a strong next generation of service-oriented solutions, combining Mercury's strength in life-cycle management, CMDB, and application mapping with OpenView's data acquisition abilities. Throw in the Peregrine acquisition for strong IT service management and the result should eventually prove compelling. Although HP Software's solution portfolio is indeed strong, its revenues are dwarfed by the results of its parent company, which puts HP Software in a challenging position: IBM, in a similar situation, has expanded its software business to a much more sizable share of IBM global, while BMC Software and CA uniquely focus on the IT management software market. To succeed, at least in the first few years, HP will need to support HP Software as an emerging strategic force within the firm, beyond simply recognizing its bottom-line contribution.