Why did HP acquire Mercury? Because it's absolutely crucial to HP's Adaptive Enterprise initiative, which purports to connect IT assets to business value. Before, HP could only make this connection at the network and systems level with OpenView -- here's the chunk of data center resources you need for this particular job and here's how it's running.
Now, with the Mercury acquisition, that visibility extends into application monitoring and portfolio management, which needs to happen in order to tie together business outcomes and technology spend in any meaningful way.
Thomas Hogan, HP's senior vice president of software, told me that Mercury's software portfolio and project management in particular filled a critical gap in HP's offering. "It gives us access at a strategic level to the CIO. Instead of being viewed as a killer server company and a killer printer company, now we're engaged at the CIO level to talk about running his organization as a business and optimizing business outcomes."
The big question is whether HP is capable of succeeding with software at any layer higher than that of OpenView. Consider the words of HP's CEO, Mark Hurd, who told analysts: "We think we have a chance for software to be truly one of the crown jewels of Hewlett-Packard."
After witnessing several big HP software fiascos -- the failure to capitalize on its early eSpeak Web services innovations, the acquisition and later abandonment of Bluestone and its excellent J2EE app server technology -- I have to wonder how big that chance may be.
I can see Mercury's runtime monitoring software extending more-or-less seamlessly from OpenView. But what does HP know about software testing, Mercury's bread and butter? Will that fall through the cracks?
That question extends to professional services as well. Mercury has a small services footprint for a software company its size, yet as I see it HP's Adaptive Enterprise initiative is essentially a professional services play. Will Mercury be adequately represented as HP consultants pitch CIOs on the vision? Or will Mercury's stuff be an afterthought or even a separate proposition?
It all comes down to how effectively HP can integrate Mercury's portfolio into the vision and the on-the-ground value proposition to customers. If HP can do it, it's a big win -- and gives retroactive meaning to the amorphous Adaptive Enterprise pitch. If it can't, then add Mercury to HP's software deadpool.