Hewlett-Packard's $4.5bn bid to acquire Mercury Interactive, announced today after close of markets, is a smart move as the top IT vendors jostle for prime position in the area of data center management and automating business processes.

The ultimate goal is to create a type of operating system for the IT data center of the future in which applications can be provisioned in near real-time, and performance loads can spread across many different resources depending on the business process. This is part of a meta-level approach to combining business processes with IT in what is called Business Optimization Software (BTO). And to do that, IT managers need to know the performance of their applications and the rest of their systems--Mercury Interactive provides part of that solution.

HP's OpenView software is already one of the leading applications for managing IT resources and the Mercury products will strengthen that product line.

From HP:

The transaction brings together the strength of HP OpenView systems, network and IT service management software with Mercury’s strength in application management, application delivery, IT governance and service-oriented architecture governance.

From HP:

The Mercury acquisition is expected to increase the size of the HP Software business to more than $2 billion in annual revenue. Immediately following the close of the transaction, Mercury will become part of the HP Software business and both companies’sales forces will begin reference-selling each others’ products.

However, HP's past performance of its software group has been rocky. Over the past few years, the company failed in its bid to establish a large middleware business through acquisitions and organic growth to rival BEA Systems, and IBM.

HP also needs to unravel some of the mess that Mercury got itself into in recent years with the SEC and make sure that there aren't any hidden problems.

Here are some call-in details for further information:

HP conference call and webcast for financial analysts and shareholders: 5 p.m. ET / 2 p.m. PT, hosted by Mark Hurd. Listen only dial-in: U.S. +1 800 299 0148, International dial-in: +1 617 801 9711, passcode: 82591745. Live audio webcast:www.hp.com/hpinfo/investor. Replay information, available until Aug. 1, 2006: U.S.: +1 888 286 8010, International dial-in: +1 617 801 6888, passcode: 55367340.

HP industry analyst call: 6 p.m. ET / 3 p.m. PT, hosted by Thomas Hogan. U.S. dial-in: +1 800 299 8538; International dial-in: +1 617 786 2902, passcode: 83000965.Replay information, available until July 25, 2007: U.S. dial-in: +1 888 286 8010; International dial-in: +1 617 801 6888, passcode: 57320057

Mercury financial analyst webcast for analysts and shareholders: 8:30 p.m. ET / 5:30 p.m. PT, hosted by Tony Zingale; David Murphy, chief financial officer; and, Shelly Schaffer, vice president, Corporate Finance.

U.S. dial-in: +1 800 289 0533; International dial-in: +1 913 981 5525, passcode: 4078554. The webcast link will be available on Mercury’s website: www.mercury.com/ir. The replay will be available via the same link.

A replay of the Mercury call will be available at +1 719 457 0820 or +1 888 2031112, passcode: 4078554. Replay will be available shortly following the conclusion of the live call for one year and the dial-in replay will be available until July 31, 2006.

Here is a comment and perspective from a note sent to me by Miko Matsumura VP, Technology Standards, Infravio, The SOA Governance Company:

This is a big move for HP. The part that is of interest from the SOA perspective is the Systinet division of Mercury.

What does this mean? First of all, it's a huge move for HP and securely puts HP at the center of the Systems Management arena for emerging SOA initiatives. IT tends to be about two fundamental forces, CONTROL and AGILITY. On the agility side are typically distributed business units — which are tied to application platforms and are interested in deploying applications rapidly and with the least possible amount of hassle.

On the control side are typically central IT people like the CIO. The CIO maintains job security by establishing control of IT systems at all times — this includes visibility but also policy enforcement. From this perspective, the Systems Management assets of HP and the IT Management assets of Mercury (and the SOA Governance capabilities of Systinet) provide the ultimate control suite for SOA as well as IT management assets.

So this is great, right? HP + Mercury + Systinet = Ultimate Control.

This is a very, very attractive combination from a value perspective. However, this sale is a very centralized CIO-centric sale.

The line of business owners want SOA for AGILITY purposes, and this is where Infravio has had tremendous success and strength —whether it's enabling business to business integration through Service Delivery Contracts(tm) or new business process centric capabilities via BPEL or other process engines. These types of drivers are attractive to lines of business.

So the turf war between Registry Repository giants continues, with Systinet moving squarely into the network management layer and focusing on control, and Infravio, the strongest independent player focusing on agility and business enablement through SOA Governance.

Miko Matsumura

Vice President, Technology Standards, Infravio, The SOA Governance Company

Chair, SOA Adoption Blueprints Technical Committee, Oasis

Blog: www.SOAcenter.com