Micro Focus Spin Merger
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So, who is Micro Focus and why is it the right partner for HPE Software?

Posted By Chris Hsu, Thursday, August 10, 2017
Updated: Thursday, July 13, 2017

"When you prepare for a global merger of this scale, it gives each company an unprecedented opportunity to look at all of their processes and take steps to optimize. We have had the luxury of stepping back and asking “how do we transform our IT platform to support our strategy for tomorrow?” Few of us ever get this opportunity."

So, who is Micro Focus and why is it the right partner for HPE Software?
By Chris Hsu | July 11, 2017

Since the announcement of the planned spin merge of HPE Software with Micro Focus, many customers have asked me a simple question: “Out of all the software companies out there, why did you select Micro Focus as your spin merge partner?”

Well, it’s actually a pretty easy question to answer—and it comes down to two things:  experience and performance. 
Micro Focus was founded over 40 years ago with a focus on COBOL. If you thought COBOL was a thing of the past, you might be surprised to learn that the COBOL business has tripled in size since 2001. In fact, in the first half of last year, COBOL grew at 14% YOY. This was driven by innovation with Visual Cobol, which allows customers to move legacy workloads on to modern deployment models such as cloud and mobile. 
On the other side, HPE Software made its debut 30 years ago with Data Protector and Network Management, products that are still core to us today and where we are still innovating. Both HPE Software and Micro Focus have grown through organic innovation and a series of acquisitions—have a look at just a few of these key acquisitions below:

To hear more from the Future Micro Focus CEO, Chris Hsu, join his highly anticipated Vivit webinar (we’ll add the title later after we get it) on Thursday, August 17th at 12:00pm EST.

Register Now!

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Discover the New

Posted By Chris Hsu, Thursday, June 15, 2017
Updated: Thursday, June 15, 2017


With our sights set on September 1st for the planned launch of the new combined company, we are preparing to join forces with Micro Focus to become the 7th largest pure-play software company in the world, with combined estimated annual revenues of $4.5 billion and 18,000 employees that will serve 40,000 customers. This will set the stage for us to shape the software industry delivering enterprise-scale solutions across the hybrid IT landscape, while focusing on value-creating M&A to further expand the portfolio.

I’m honored to have been named CEO of the new combined company following completion of the transaction, and I am excited to have appointed my leadership team for the new combined company, which will take effect on our expected "day one”, September 1st. The new team will bring together a strong, balanced mix of leaders from both HPE Software and Micro Focus, and marks a major milestone on our road to close.

At HPE Software, our mission is to provide our customers with a best-in-class portfolio of enterprise-grade scalable software with analytics built in. We put customers at the center of our innovation and build products that our teams can be proud of. This mission is absolutely critical to helping our customers Discover the New– across our company, innovations and portfolio while leveraging the IT environments they have today.

As we approach this new chapter, I look forward to keeping you informed on our progress. To help with this, we are excited to launch our new externally-facing microsite today as well, fully dedicated to HPE Software news, innovations, and updates on the spin-merge. Please check it out and Discover the New!

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More exciting information about the HPE Software Spin-Merge with MicroFocus

Posted By Administration, Tuesday, June 13, 2017

We wanted to keep you up-to-date about some important questions that have been frequently asked by our user community members.

Why is HPE Spinning and Merging with Micro Focus?

HPE made the decision to spin-merge HPE Software with Micro Focus to create two businesses that are stronger, more focused, delivering faster outcomes to customers. The spin-merger creates a new industry player, Micro Focus, which will be valued at $4.5B and be one of the world's largest pure-play enterprise software companies.

Why is Micro Focus the perfect company to take on HPE Software assets?

Micro Focus has a proven track record of managing both growing and mature software assets. Together, HPE’s Software assets and Micro Focus will have global reach and strong go-to-market capability with nearly 4,000 salespeople and deep R&D resources – ensuring that our customers continue to receive best-in-class software solutions. The combination will enable higher levels of investment in growth areas, while maintaining a stable platform for mission-critical software products.

When will the HPE Spin-Merger with Micro Focus be complete?

The transaction is expected to be complete in the second half of HPE’s fiscal 2017, with customer and partner commitments remaining unchanged.

What will the HPE ownership of the new company be?

HPE will not have an ownership stake in the new organization – it will be an independent publicly traded company. HPE shareholders will own 50.1 percent of the new organization.

What will the leadership of the new company be?

Chris Hsu will assume the role of Chief Executive Officer of the combined HPE Software and Micro Focus company pending deal close, which is currently targeted to be completed by approximately August 31, 2017. Until then, Stephen Murdoch will remain chief executive of Micro Focus, and then become chief operating officer.

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Some things about HPE Software summit 2017. Number three will shock you.

Posted By James Governor, Monday, June 12, 2017

I came to HPE Discover 2017 with fairly low expectations. I was there to talk to customers about their agile and DevOps transformations, rather than for the formal analyst program. In case you haven’t been following the news in September a newco will be formed in what HPE is calling a “spin merge” with Micro Focus, based in Newbury in the UK, to create the world’s seventh largest pure play software company. Seventh might not seem a great target, but it has the benefit of being a clear position in the market, which HP isn’t trying to hide from. Once the merger is completed, we can expect more acquisitions as the company looks to grow aggressively and move up that pecking order.

I spent two days in sessions with customers, and they seemed very calm about the transition with an expectation that their investments would be protected, maintenance contracts supported, and new functionality delivered as promised. I spoke to one customer that signed a $15m software deal with HP in late 2016, and though concerned before the event kicked off, left a great deal more confident about next steps.

Partners I talked to were also in good spirits about the transaction. One reseller said he expected the deal to be good for his business because the HPE newco would be focusing entirely on software, rather than being confused about what to sell, and when. Companies like HP that make the majority of their revenues from hardware can find it hard to focus on software. The kind of salesperson used to selling 15 servers are not the same as the kind that appreciate the longer sales cycles of enterprise software sales. Getting corporate attention in marketing and strategy is also pretty hard when you’re only a small portion of overall sales.

The new executive team for the new co makes sense. I don’t know the GMs running security and data so well, but Raffi Margoliat and Tom Goguen, running application delivery management and IT Ops management respectively clearly both have a zest for what they’re doing. New global VP of Sales and Marketing Sue Barsamian seems pretty clear on go to market and narratives.

What really changed the game was Chris Hsu, who will be CEO. He did a bang-up job of kicking off the event on day one. His story was crisp, the strategy was clear and he did an excellent job of being forward looking while not trying to hide the fact many of the assets of the combined company are very much legacy assets. Legacy assets with really good cashflow. He was unapologetic about the fact that Cobol would be a significant revenue stream in the new business, and Micro Focus has done a phenomenal job recently of driving up revenues and share price from 2011-2016 – comparable with the performance of Amazon, Facebook or Microsoft in that time frame.

To be honest the Micro Focus portfolio is a bit of a grab bag and contains a bit of a pick and mix of legacy assets – Borland, Attachmate, Serena Software to name three. Micro Focus been pursuing the classic portfolio approach to growth. It also has some intriguing more modern assets too – it owns Suse, the enterprise Linux distribution company, for example, so there is some interesting technical leadership there. IBM doesn’t own a distro, HPE will.

From a competitive perspective, while it didn’t mention it by name, HP is clearly planning to compete aggressively with Splunk, and likely Cloudera, in the market for log analysis and security incident management. The company plans to use its Vertica column oriented database, with a Kafka based ingestion engine running on top of it, to compete in big data-related markets.

The newco is going to have to execute near flawlessly to make a significant impact as a progressive software company. It is making a multicloud play for now, but that may partly reflect the parent company’s push for a hybrid IT strategy. A new software company launched would almost certainly be SaaS only if not SaaS first, and would make a bet on a particular cloud provider. We may yet see the newco chose a cloud partner for its SaaS plays. On the other hand, HPE’s enterprise customers are indeed the kind of companies that expect hybrid and multicloud support, in terms of their deployment options.

It will be hard to avoid the desire to become yet another “new CA”, serially buying companies but not being seen for organic innovation.

But if you read Stephen’s The Software Paradox, which makes the case it’s becoming ever harder to sell software even as software eats the world it’s clear challenges are going to be very real. Cloud generally and SaaS specifically are the new convenient consumption models of choice. People want to pay for services, not software. Selling traditional on prem software also prevent the creation of new data aggregation oriented business models.

I don’t want to be overly positive about HPE’s future, but I came away with a far more positive view after a couple of days in Vegas, and I know for sure that many of HPE’s major customers felt the same way.

Disclosure: HP is a client. Paid T&E.

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Micro Focus Names HPE’s Chris Hsu CEO of Group

Posted By Chris Hsu, Wednesday, January 25, 2017
Updated: Monday, June 12, 2017
It was announced January 17th that Chris Hsu, Chief Operating Officer of HPE and Executive Vice President of HPE Software will be appointed as the new CEO of the go-forward combined company once HPE Software merges with Micro Focus.

This is great news for the Vivit and software community. Chris has had a remarkable career at HP and HPE. In his current and previous roles, he has driven large scale transformations to enable greater company agility, instill operational discipline and drive profitability. As the leader of HPE Software, Chris is directly engaged with HPE Software's portfolio investment strategy, has a keen sense of the market and a strong commitment to a customer-centric culture.

Mr. Hsu will take up his role following completion of the proposed merger. Until then, Stephen Murdoch will remain chief executive of Micro Focus, and will then become chief operating officer for the enlarged group. Nils Brauckmann will remain chief executive of SUSE, and as previously announced, Kevin Loosemore will remain executive chairman until at least April 2018.

Micro Focus plans to announce further details of board composition and executive management of the enlarged group when the prospectus is published in the third quarter of 2017.

We hope you share our excitement at this news and the confidence it shows the market holds in Mr. Hsu, the HPE Software products and the HPE Software team.

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