After Dell, HP Enterprise (HPE) Selling Software Business : Impact of Amazon and Azure Cloud Services?
IT hardware companies are going through changes to find their sweet spot and positioning in an industry that is going through digital transformation and disruption by cloud based technologies. After Dell sold its software division in June 2016 to Francisco Partners and Eliott Management Corporation, Hewlett Packard Enterprise Co (HPE) as per Reuters is negotiating with Thoma Bravo LLC to sell its software division for up to $10 billion. As per Reuters, the following software assets are potentially included in the deal:
HPE acquired part of its software portfolio as a result of its ill-fated $10.3 billion acquisition of Autonomy Corp in 2011 and the $4.5 billion acquisition of Mercury Interactive in 2006. The software assets also include Vertica, a big data analytics platform, ArcSight, a cyber security firm as well as products for IT operations management.
Dell’s software assets that were sold are also similar to HPE’s software portfolio. As per a press release in June,
Dell Software’s comprehensive portfolio of solutions span a number of areas critical to the modern business and IT management landscape, including advanced analytics, database management, data protection, endpoint systems management, identity and access management, Microsoft platform management, network security, and performance monitoring. With Dell Software solutions, organizations of all sizes can better secure, manage, monitor, protect, and analyze information and infrastructure in order to help fuel innovation and drive their businesses forward.
Public cloud emergence specially Infrastructure as a Service (IaaS) and Software as a Service (SaaS) have impacted many traditional IT players. Hardware and software products that would typically get installed in data centers or private cloud are now available from the public cloud as a service. Salesforce.com, Workday, Tableu and several other new SaaS providers are diminishing the need for enterprise software to be installed and managed by corporate IT departments. Gartner just released the 2016 IaaS Magic Quadrant report and we can see public cloud growing and consolidation happening with Amazon and Microsoft leading the pack.
Both Satya Nadella, CEO Microsoft and Jeff Bezos, CEO Amazon have been bullish on the future of their companies driven by cloud technologies and offerings. Microsoft released FY16 Q4 results in July and reported commercial cloud revenue for the whole year at greater than $12B. That is driven mostly by Office 365 SaaS revenue and it is unclear how much Azure IaaS and Platform as a Service (PaaS) have contributed. In April 2016, IBM reported ~$10B cloud based annual revenue but it is also unclear how much of that is SaaS vs IaaS. As of July earnings, Amazon reported total $9.9B in IaaS revenue for last four quarters. Oracle’s total cloud revenues in Q4, FY16 including IaaS was $2.9B.
The emergence of cloud has also impacted the IT services industry. Per Reuters, in May, HPE agreed to merge its IT services and outsourcing unit with Computer Sciences Corp (CSC) to create a $9 billion company in a tax-free all-stock transaction. Earlier in 2016, Dell sold its consulting business to Japan’s NTT Data Corp for over $3 billion as NTT desires to expand in North America and bolster its services business.
With increasing popularity of Internet of Things (IoT), big data analytics etc, IT companies who do not offer or are not successful in public cloud services are focusing on helping enterprises manage public cloud services. At VMworld 2016, VMware CEO Pat Gelsinger’s main message and the theme of the show was Software Defined Data Center (SDDC) and managing multiple clouds, IoT and Digital Workspace management. Meg Whitman, HP CEO, Michael Dell CEO of Dell Technologies and leaders of other traditional IT vendors are going to continue to disaggregate legacy low value assets and build new innovative technologies to find a meaningful position in the mobile-cloud-IoT era.
Are you an expert in IoT, Big Data, Virtualization, Cloud, Mobile, Artificial Intelligence and/or IT technologies?Do you want to feature yourself or your content on VcloudNews.com? Do you have products you would like to showcase to our visitors? Or simply do you want to share your comments with our readers? We want to hear from you and have both free and sponsorship opportunities for you and your products. E-mail us at firstname.lastname@example.org to join the fun.