HPE wraps up $8.8bn Micro Focus software dump spin-off

Newly minted software giant formally begins operations

HPE says it has closed the $8.8bn deal to spin off much of its software business with Micro Focus.

The enterprise giant said that the deal – which sees HPE merge the unwanted portion of its software operation with the UK-based Micro Focus to create what analysts estimate to be the seventh-largest software vendor in the world – had been finalized.

"With the completion of this transaction, HPE has achieved a major milestone in becoming a stronger, more focused company, purpose-built to compete and win in today's market," said HPE CEO Meg Whitman.

"And, this transaction will deliver approximately $8.8bn to HPE and its stockholders."

First announced in September 2016, the reverse-takeover agreement sees HPE selling off its IT management, big data, and security lines to Micro Focus, which will try to make the products more successful than they were under the former HP Inc.

"Our business strategy remains sound: bringing together software assets that deliver a high degree of value to our investors and an expansive solution portfolio to our customers so they can maximize the value of existing IT investments and adopt new technologies, essentially bridging the old and new," Micro Focus executive chairman Kevin Loosemore said.

According to analysts, the success or failure of the newly combined Micro Focus will depend largely on its ability to take over two key markets. Forrester's Eveline Oehrlich sees DevOps and enterprise service management being the lines that will make or break the company as it looks to win over enterprise customers.

This means areas such as data center automation and hybrid cloud management will be of particular importance.

"Its mission is enterprise automation for hybrid technology environments," Oehrlich explained.

"The new Micro Focus will tackle one of the toughest problems facing infrastructure and operations leaders at all companies that weren't born digital: managing a heterogeneous ecosystem that includes everything from mainframes to containers running in cloud environments." ®


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