HP reassures Mercury customers over integration plans

The vendor predicts a smooth transition, but rivals are waiting if things go wrong

HP today insisted it would be able to successfully integrate its planned acquisition of IT governance software specialist Mercury Interactive. Meanwhile, rival IT management software vendor Managed Objects said it aims to attract disgruntled Mercury customers and employees.

The proposed $4.5bn deal won widespread approval when it was announced last month, as many commentators agreed Mercury's application management, testing and governance suites would plug important gaps in HP's OpenView management software portfolio. However, some analysts noted that HP has had mixed success in integrating acquired firms in the past, and this track record and the scale of Mercury raises some doubts about the post-merger prospects.

Andy Isherwood, head of software for Europe the Middle East and Africa at HP, insisted such concerns were unfounded. "We've made a high number of software acquisitions recently that have been integrated well and seamlessly… and we have a robust and industrialised process for integrating companies," he said.

Meanwhile, rival vendor Managed Objects this week announced it had launched a new recruitment programme, entitled "Operation Lifeboat", to recruit Mercury staff disgruntled by the HP deal.

Sean Larner, general manager of European operations at Managed Objects, said the company would also target Mercury customers concerned that their supplier's "best of breed" culture will be lost once it has been consumed by HP.

"We'll find some customers that have Mercury in their portfolio and will want to swap it out as they fear [that following the deal] they will be tied in to yet another framework vendor," Larner, said. "There will be companies loath to go with HP… HP gets $2bn from software and that is still not large enough to get the company's full attention."

Isherwood said such comments from competitors were predictable and insisted customer feedback about the deal had been extremely positive. "The deal is bringing together elements customers buy separately and they see further integration of those assets as a very powerful benefit," he argued.

Isherwood added that Mercury and HP customers would be frequently consulted throughout the integration process. "We use customer councils extensively to ensure they do not get anything forced upon them," Isherwood said.