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Big Growth, New Shape For HP Software Group

By Clint Boulton

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UPDATED: Hewlett-Packard (Quote) unveiled its revamped software division today and just in time. The division is practically bursting at the seams after more than doubling in size since HP's 4.5 billion purchase of Mercury Interactive.

The systems vendor unveiled the software group, which includes HP's OpenView management and Mercury's application management and delivery and IT governance software, at its annual HP Software Universe conference in Vienna, Austria.

Over 3,500 HP end users are convening at the show this week to hear the company's new vision, Magdy Assem, worldwide director of product marketing for HP Software, said in a recent interview.

"The key strategy is to help CIOs optimize the business outcome of IT, not the IT outcome," Assem told internetnews.com.

"The message here is our ability as a new organization to put together, applications, operations and strategies which are different from siloed IT functions today."

Business technology optimization (BTO) describes practices that help companies match the appropriate IT functions with the right business processes to improve operating efficiencies and keep costs in line.

To help customers achieve BTO, HP is stressing three key areas: change and configuration, IT service and performance, and availability. But they're split into nine "software centers," or suites of software, services and best practices:

The system vendor has already upgraded one of the products in its IT service lifecycle, introducing HP ServiceCenter Software 6.2, which boasts an embedded service catalog to standardize the interface for IT goods and services, embedded knowledge management and better configuration management.

But there's more than the software division reorganization afoot. HP today also introduced HP Configuration Management Software 5.0, an application in the change and configuration lifecycle that provides any computing device on a network the right software configuration to support the business.

The portfolio integration and new software comes about five weeks after HP consummated the Mercury buy on November 6.

Some experts believe this deal could vault HP past IBM (Quote), CA (Quote) and BMC (Quote) in the management software market, provided HP plays the integration game right and is able to reliably deliver software in a competitive multi-billion-dollar market.

IDC analyst Stephen Elliott wouldn't go that far, but confirmed that despite not offering software to manage mainframes as IBM, CA and BMC do, HP is well positioned to compete.

"Replacement business is becoming more of the norm in many management software markets in North America, and HP now has more resources to compete and a broader portfolio enabling the company to generate highly profitable software revenues for HP corporate," Elliott wrote via e-mail.

Elliott said "challenges include the ability of HP software to embrace the more aggressive Mercury culture, the cross pollination of product level and executive level sales skill sets, limited portfolio in storage management and security, creating sustainable profitability for HP software, and penetrating the HP hardware channels for the SMB markets."

But for this week, HP is just hoping not to drown customers with a fire hose of new information.

"We recognize this is a lot for our customers to digest," said Deborah Traub, vice president of management software for HP Software. "The goal here is to try and simplify and rationalize the portfolio in a way that is easier for customers to understand, that maps to the buyers' pain points."

Meanwhile, while several Mercury executives have transitioned to roles within the new HP Software group, former Mercury CEO Tony Zingale remains in a "transition role," Traub said.

Essentially, Zingale doesn't really have a role right now while the company is still integrating the executive teams.

This article was first published on InternetNews.com. To read the full article, click here.