HPE sells "non-core" software assets to UK's Micro Focus

HPE pins future on providing software-defined technology

Hewlett Packard Enterprise (HPE) narrowed its focus even further yesterday, announcing during its Q3 earnings call that it will be selling off its Software Business Segment to UK business Micro Focus.

The segment, which includes big data, enterprise security, software delivery and test, and IT operations management, contributed to an 18% drop in revenue to $738 million for HPE's software division in the company's latest quarterly results, released yesterday.

Micro Focus's decision to buy the division makes it HPE's second major sell-off this year, after the company merged its enterprise serices unit with CSC in May. Prior to that, it sold its intrusion prevention division, Tipping Point, to Trend Micro for 195 million last October.

The latest transaction, valued at approximately $8.8 billion (6.6 billion), is the largest deal made by any UK company for some years and is expected to close in Q3 2017.

Advertisement
Advertisement - Article continues below

Calling the for-sale assets "non-core", HPE CEO Meg Whitman denied her company is getting out of software, instead saying it is repivoting to focus on software-defined technology.

"I want to be crystal clear HPE is not getting out of software," said Whitman. "Software is still a key enabler of our go-forward strategy, but we need the right assets to win in our target markets.

"Moving forward, we will double down on the software capabilities that power and differentiate our infrastructure solutions and are critical in a cloud environment."

She pointed to HPE's new software-defined and cloud businesses, saying it would use assets like IT management tool OneView and the Helion Cloud platform to deliver software-defined hybrid IT products such as its infrastructure platform Synergy.

Since OneView's launch in 2013, HPE has sold nearly 500,000 licenses, Whitman claimed, hailing a growing partner ecosystem including firms like Docker, Chef, Turbonomic and SaltStack. HPE also bought high-performance computing firm SGI over this summer.     

"I am confident that we are making the right choices. Once the ES-CSC and Software-Micro Focus transactions are complete, HPE will be a faster-growing, higher-margin and stronger free cash flow company, well positioned for the future," she added.

Micro Focus said buying HPE Software aligns with other recent acquisitions of Serena Software and the Attachmate Group.

Kevin Loosemore, executive chairman of Micro Focus, said: "Today's announcement marks yet another significant milestone for Micro Focus and is wholly consistent with the long-term business strategy we have been pursuing to be the most disciplined global provider of infrastructure software.

"The combination of Micro Focus with HPE Software will give customers more choice as they seek to maximise the value of existing IT assets, leveraging their business logic and data along with next-generation technologies to innovate in new ways with the lowest possible risk."

The announcement followed HPE's financial results for its third fiscal quarter of 2016, reporting a 6% drop in revenue year-on-year to $12.2 billion. Its Enterprise Group revenue was $6.5 billion, down 8% year-on-year, while Enterprise Services revenue dropped 5% to $4.7 billion.

Featured Resources

The IT Pro guide to Windows 10 migration

Everything you need to know for a successful transition

Download now

Managing security risk and compliance in a challenging landscape

How key technology partners grow with your organisation

Download now

Software-defined storage for dummies

Control storage costs, eliminate storage bottlenecks and solve storage management challenges

Download now

6 best practices for escaping ransomware

A complete guide to tackling ransomware attacks

Download now
Advertisement

Recommended

Visit/strategy/28233/everything-you-need-to-know-about-hpe
Business strategy

Everything you need to know about HPE

24 Jun 2019
Visit/server-storage/34260/hpe-proliant-dl20-gen10-review-compact-and-bijou
Server & storage

HPE ProLiant DL20 Gen10 review: Compact and bijou

31 Aug 2019
Visit/server-storage/34140/hpe-proliant-ml30-gen10-review-a-tower-of-strength
Server & storage

HPE ProLiant ML30 Gen10 review: A tower of strength

5 Aug 2019
Visit/business-strategy/33903/view-from-the-airport-hpe-discover-2019
Business strategy

View from the airport: HPE Discover 2019

25 Jun 2019

Most Popular

Visit/operating-systems/microsoft-windows/354297/this-exploit-could-give-users-free-windows-7-updates
Microsoft Windows

This exploit could give users free Windows 7 updates beyond 2020

9 Dec 2019
Visit/business/business-strategy/354304/ex-apple-cpu-architect-accuses-the-firm-of-invading-privacy
Business strategy

Ex-Apple CPU architect accuses the firm of invading privacy

10 Dec 2019
Visit/security/vulnerability/354309/patch-issued-for-critical-windows-bug
vulnerability

Patch issued for critical Windows bug

11 Dec 2019
Visit/cloud/microsoft-azure/354230/microsoft-not-amazon-is-going-to-win-the-cloud-wars
Microsoft Azure

Microsoft, not Amazon, is going to win the cloud wars

30 Nov 2019