No Middle Ground

HP shuns middleware, embraces enterprise services in wake of Compaq merger

What are the new Hewlett-Packard post-merger plans for former HP and Compaq software and services aimed at the enterprise market? Enterprise systems and consulting services that use them are being elevated to the top of HP's priorities, while the company seems to be abandoning its proprietary middleware projects.

When the proxy battle ended and the merger received confirmation to be approved, chairman and CEO Carly Fiorina and president Michael Capellas launched the new company under the slogan "We Are Ready." They published a very clear set of plans for rationalizing the former companies' overlap. Conspicuously, the only area left largely undesignated was HP's Middleware division.

At press time, HP was unwilling to discuss its middleware plans, but did hint that all would be made clear in summer 2002. As this story went to press, HP's plans evidently included jettisoning some or all of its middleware development. Peter Blackmore, vice president of the Enterprise Systems Group at HP, was reported to have said at HP's H102 securities analyst meeting in Boston that HP would "retire" its middleware. A public relations spokesperson for HP Middleware stated, when we approached the division for further comment, that Blackmore's comments were "premature," as HP had not fully formulated its plans. It was not clear whether Blackmore was referring to the application server products acquired from Bluestone the year before or to other products in HP's middleware line, such as its Java Message Service or Process Manager.

IDC program manager Michele Rosen, who follows HP Middleware, was already predicting this course of action as Blackmore's leak was occurring. The two likeliest of three possible courses of action she said HP could take specifically with its J2EE application server were to "kill it" or to sell off the division for its human capital value. (Shortly after Blackmore's slip of the tongue, a rumor emerged that Oracle was considering buying some of HP's middleware assets.) The core product, Total-e-Server (formerly Bluestone Software Inc.'s Sapphire), although an early favorite in the application server market, saw its market share dwindle to practically nothing as first-tier vendors IBM and BEA Systems Inc. grew their market share with WebSphere and WebLogic, respectively.

Rosen went on to say that the new HP's stated desire to work as well with .Net as with Java may mean that HP should not compete against Microsoft with its own Java 2 Enterprise Edition (J2EE)-based middleware. Pre-merger, Compaq had been pursuing a .Net-based approach to component integration in partnership with Microsoft.

Chris Rooke, VP of marketing and solutions for the NonStop Enterprise division, demurred when asked if Total-e-Server would become the J2EE application server of choice in future Zero Latency Enterprise (ZLE) implementations. ZLE is a Compaq practice based on the NonStop (Himalaya) server line; one of its pilot projects was for Target Stores. "We haven't seen any call for it [from the customer base]," he says, and went on to say that the company would be announcing some new middleware deals with partners before this story appears in print.

In a June 19 release about the new HP NonStop servers, HP also announced partnerships with Tibco Software Inc. and SeeBeyond Technology Corp. to provide the integration software for the new servers. Later, on June 24, HP and BEA Systems jointly proclaimed each other "preferred strategic partners," committing to push integrated J2EE e-business systems using BEA's application server software with all HP platforms, including the NonStop Kernel.

Both ZLE and HP Middleware fall under Blackmore's Enterprise Systems Group.

Unlike the sketchy destiny of the Middleware division, the ZLE program's future seems secure at the new HP. "The strategy that is behind ZLE remains intact; largely what we see is the possibility for enhancing the market scope," Rooke says of ZLE's post-merger prospects, referring to the merger bringing more resources to the ZLE program, such as additional sales force and partnerships.

As applications become less and less dependent on platforms, it becomes harder for platform vendors to remain profitable. HP's executives have overtly stated their intentions to capture more of the enterprise services market, wherein lie the bigger returns.

— Jeanette Burriesci

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