HP Braves Acquisition Return With Eucalyptus Purchase

Hewlett-Packard returns to the mergers and acquisition market with the news that it plans to purchase cloud software startup Eucalyptus Software.

It comes after the technology giant got its fingers badly burnt from a number of disastrous acquisitions in recent years, including that of Autonomy Plc in 2011, and Palm in 2010.

Helion Move

Since that time, Hewlett-Packard has shunned the acquisition market, as it concentrated on restructuring and cutting costs. But now the company has announced a return to acquisition trail with the purchase of Eucalyptus for an undisclosed amount. Eucalyptus provides open source software for building private and hybrid enterprise clouds.

Eucalyptus CEO Marten Mickos will join HP as senior VP and general manager of the Cloud business, reporting to Meg Whitman, whose management roles were recently expanded to include the position of CEO, President, and chairman of HP.

Mickos has something of a track record in building up open source companies and selling them to tech giants. He was formerly the CEO of MySQL, which was acquired by Sun Microsystems for $1bn (£615m) in 2008. Now at HP, Mickos is to be tasked with leading the HP Cloud unit and helping it grow the HP Helion portfolio.

“The addition of Marten to HP’s world-class Cloud leadership team will strengthen and accelerate the strategy we’ve had in place for more than three years, which is to help businesses build, consume and manage open source hybrid clouds,” said Whitman. “Marten will enhance HP’s outstanding bench of Cloud executives and expand HP Helion capabilities, giving customers more choice and greater control of private and hybrid cloud solutions.”

“Eucalyptus and HP share a common vision for the future of cloud in the enterprise,” said Mickos. “Enterprises are demanding open source cloud solutions, and I’m thrilled to have this opportunity to grow the HP Helion portfolio and lead a world-class business that delivers private, hybrid, managed and public clouds to enterprise customers worldwide.”

The existing boss of HP’s Cloud business, Martin Fink, will remain in his roles as CTO of HP and director of HP Labs.

“We’ve said before that we believe the future of the Cloud is open source, and this transaction underscores our deep commitment to helping customers build enterprise-class, open clouds their way,” said Fink.

Acquisition Headaches

The purchase of Eucalyptus signals HP’s intent to flex its financial muscle and return to the acquisition market after some disastrous purchases in recent times.

HP’s purchase of British software giant Autonomy for example has turned into something of a nightmare for the company. Last month, it said it would sue former Autonomy CFO Sushovan Hussain, and it has accused  former Autonomy CEO Mike Lynch of fraud.

Autonomy’s former management have vigorously denied the charges, and contest that HP botched the acquisition.

HP also did not have much luck it acquired Palm for $1.2bn (£722m) in 2010. At that time, it was optimistically predicted that the deal would propel HP into the smartphone and tablet big leagues, and even allow it to take on the likes of Apple.

However the deal also had many doubters, who were proved right after HP announced in August 2011 that it was dropping WebOS and was discontinuing its TouchPad tablet devices (which ran Palm OS). Hewlett-Packard eventually all but gave away Palm’s operating system to LG Electronics, which is now using it to power its range of Smart TVs.

In January this year, HP managed to offload its portfolio of 2,400 Palm patents to chip manufacturer Qualcomm for an undisclosed sum.

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