Software Vendors Weigh In On HP-Compaq Merger

A number of ISVs see potential for a bigger, better HP but aren't blind to the risks. Excelon, an XML software maker based in Burlington, Mass., partners with HP and has experience with technology mergers since it acquired solution provider C-Bridge last year. CEO Joe Bellini says combining the strongest products from both companies could give the new HP a much stronger product family, which would certainly benefit eXcelon.

However, Bellini questions if the cultural merger between the rival computer makers could work and also wonders what kind of leadership the new HP would have with both HP CEO Carly Fiorina and Compaq chief Michael Capellas as CEO and president, respectively.

"The interesting thing about the merger is that Carly is a day-to-day leader and a good communicator, while Capellas is focused more on strategy and long-term operations," Bellini says.

On the other hand, BEA Systems CEO Alfred Chuang says he believes bringing the people together will be easier than integrated the vast technology family and the difficult decisions over which products will stay and which will be eliminated. "Culturally, I think the two companies can make it work," Chuang said. "It's the technology that's the real question."

Some ISVs--such as Microsoft, SAP and PeopleSoft--have displayed optimism that the merger will be successful. Others are hoping the elimination of Compaq won't adversely affect their software business by giving them less hardware to sell on.

As for the growing Linux community, the effects are uncertain. Both HP and Compaq have championed the open source operating system lately. During her LinuxWorld keynote in January, Fiorina said the proposed merger would be good for Linux and the open source industry.

"One of the aspects of merging with Compaq that our customers find most appealing is that we are both committed to driving adoption of Linux on the Intel and Itanium platforms," Fiorina said during her keynote.

Linux developers and solution providers credit HP with bringing Linux to the enterprise. Computer Associates CEO Sanjay Kumar says he's seen a lot of involvement from HP in the Linux market, but considers IBM the main catalyst for Linux growth in the hardware market.

Ironically, some of the loudest voices in the software industry have been uncharacteristically quiet about the proposed merger. During a press conference at Comdex last November, Oracle chairman and CEO Larry Ellison opened the floor to reporters to "anything" they wanted to talk about. However, Ellison was tight-lipped on the mega-deal, saying he wasn't qualified to comment on it.

IBM has also been quiet on HP-Compaq. Although one of HP and Compaq's fiercest rivals, Big Blue has essentially ignored the deal and instead has focused it's competitive energy of late on Sun Microsystems in the server market and BEA in the Internet application server race. Newly appointed IBM chief Sam Palmisano spoke little about the proposed merger during IBM PartnerWorld last month but did say that HP/Compaq "wants to be a services-based solution company combined with infrastructure."