Hewlett Packard Enterprise

HPE explores software unit sale

Trade
(Image: Hewlett Packard Enterprise)

2 September 2016

Hewlett Packard Enterprise is said to be looking to sell its software division, which would include the business from its disastrous acquisition of Autonomy in 2011, according to news reports.

The enterprise IT company that emerged from the breakup of Hewlett-Packard has been restructuring its operations recently, including a $8.5 billion deal announced in May to spin off and merge its enterprise services business with CSC. A sale of the software business would leave the company focused largely on servers, networking, storage, business critical systems and technology services.

HPE is aiming at a price of between $8 billion and $10 billion for the software unit, reported the Wall Street Journal, quoting a person familiar with the situation. Reuters also earlier reported talks by HPE with private equity firms, including highest bidder Thoma Bravo, to hive off the software business.

HPE  does not comment as a policy on rumours and speculation, a spokeswoman said Thursday evening.

The sale of the software business will also help HPE put behind it the controversial acquisition of Autonomy, a software company in the U.K. The undivided HP took a $8.8 billion charge in 2012, alleging serious accounting improprieties at Autonomy before the acquisition. The charges were denied by the former management of the software firm, leading to legal claims and counterclaims.

HPE’s software division had revenue last year of $3.6 billion down by about 8% from $3.9 billion in the previous year, a decline it attributed to customers’ transition to SaaS (software-as-a-service)  subscriptions. The unit being offered for sale is focused on software for managing business operations, with the company planning to keep software businesses linked with parts of customers’ key technology infrastructure – such as software defined networking, WSJ said.

“If they were to sell their current software business, I would expect them to make new software acquisitions at the PaaS and IaaS layer,” Moorhead wrote. “They have to be in software in some way, the only question is how.”

IDG News Service

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