Bluestone To Remain Intact After HP Deal Closes

The Bluestone Software management team won't have to worry about pink slips when Hewlett-Packard completes its acquisition of the company next month, a Bluestone executive said.

John Capobianco, Bluestone's executive vice president of strategic planning, says HP's intent when it bought the Philadelphia-based application server vendor was not just to acquire HP's Total-e-Business platform so it could compete on middleware against rival hardware vendors IBM and Sun. Instead, he says, it was related to an entire software strategy.

"Why do you think HP retained the entire Bluestone management team, who are software executives?" Capobianco says. "Certainly, a big piece of what HP is interested in is not just a product, they wanted the software group. That's why they left the Bluestone organization virtually intact in Philadelphia, so they would maintain the management and the momentum the management would bring."

HP is expected to reveal its strategy for Bluestone at a press and analyst briefing on Feb. 13.

As CRN reported last week, the unveiling of an e-business platform called NetAction, a suite of products integrating current HP software products and Bluestone's Total e-Business platform, also is imminent.

Capobianco says he expects Bluestone to retain its name as the middleware division of HP, just as WebSphere is the middleware division of IBM.

"[The acquisition] is not going to fundamentally change our products," Capobianco says. "It gives us lots of enhanced capability, a broader array of products to integrate into, a much larger distribution force, but our core application server product doesn't change."

John Rymer, principal consultant and founder of IT business strategy firm Upstream Consulting, says while Bluestone has a strong product and is a good fit for HP, the Palo Alto, Calif.-based vendor still has an uphill battle if it wants to be a strong competitor in the software-platform market.

"Aside from OpenView, HP has never [had] an industry-leading software business," Rymer says. "[Being successful in software] has very little to do with if a product is competitive. It has everything to do with commitment and smarts to how you build a business and sustain it, and how you manage the political conflicts that inevitably arise inside your corporation," he says.

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