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HPE to Merge Software Business with UK-Based Micro Focus

September 09, 2016




It’s been nearly a year since the Hewlett-Packard (News - Alert) split that created Hewlett-Packard Enterprise and HP Inc. occurred. Yet the transformation at HPE continues.

Indeed, HPE this week announced plans to unleash its software unit via an $8.8 billion transaction with Micro Focus.

The deal aims to create one of the world’s largest pure-play software companies – with solutions in the big data analytics, cloud, information management, IT operations, and open source and development arenas; a worldwide salesforce of nearly 4,000; and $4.5 billion in annual revenue.

But rather than completely divorcing itself from the software unit, HPE has elected to create a new company with U.K.-based enterprise software company Micro Focus for which it will receive a $2.5 billion cash payment to contribute these assets and in which HPE shareholders will have 50.1 percent ownership. This is a similar arrangement to what HPE did in spinning off its consulting services unit to CSC (News - Alert), in which HPE now owns half.

As part of this new deal HPE and Micro Focus have named SUSE their preferred Linux partner. Through this relationship they aim to integrate HPE’s Helion OpenStack and Stackato (News - Alert) solutions with SUSE’s OpenStack expertise.

Meanwhile, the stand-alone HPE that remains aims to be a leading provider of hybrid IP solutions and offer software-defined infrastructure for use in cloud and data center environments for branch, campus, and IoT applications.

“With today's announcement, we are taking another important step in achieving the vision of creating a faster-growing, higher-margin, stronger cash flow company well positioned for our customers and for the future,” said HPE President and CEO Meg Whitman. 

In addition to the HP split, which put the former company’s personal systems and print business under what is now HP Inc., and put networking gear and software under HPE, companies such as Symantec (News - Alert) have split in recently years 




Edited by Alicia Young
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