Time to move away from HPE Software

If you are still using HPE Software, you should actively plan to migrate away. The recent divestiture does not look good to me - I think existing customers are going to get soaked. Plan your migration now.

I’ve said it before, that I retain a soft spot for Hewlett-Packard. They gave me my first professional job out of university. I served my sentence doing HP OpenView consulting, and HP-UX Administration, but still: it got me started. Once you have some professional experience, it’s much easier to move to the next role.

It saddens me to watch HP’s ongoing struggles. It’s sad to watch a big ship get broken up for parts. But things had to change. They need to do something to adapt to the realities of modern IT demands.

There was one line in the recent announcement about divesting HPE’s software assets that stood out to me:

Micro Focus expects to improve the margin on HPE’s software assets by approximately 20 percentage points by the end of the third full financial year following the closing of the transaction

Press Release

(Emphasis added).

It has been clear for a while that HP Software was no longer a core asset for HPE. It was clear that it was not adapting, and was being starved for investment. Revenues have seen decline. Smart customers have seen this coming, and have been actively migrating away from HPE Software.

But if you’re still using it, you should pay attention to that press release. How do you think Micro Focus plans to improve margins by 20 percentage points? That’s a lot of margin. You’ve got three options:

  1. Increase sales. Software development has high fixed costs, so margin improves with additional sales.
  2. Increase prices, collecting more money from existing customers.
  3. Reduce investment, spending less to improve margins, and hope customers don’t notice.

This is a mature business. They will have a low percentage of new customers. Most revenue will be coming from existing customers. It is not a growth market. So what’s left? Raise prices, and reduce investment.

If you’re an existing customer, expect to see more license audits, and higher renewal quotes. Expect to see feature stagnation.

It won’t happen straight away, but it will happen. If you’re still delaying that migration, time to get a move on.