The merger of Micro Focus and Hewlett Packard Enterprise’s (HPE) software business has been completed, creating the seventh-largest pure-play enterprise software company in the world.
Chris Hsu, formerly chief operating officer of HPE and executive vice-president and GM of HPE Software, was appointed CEO of Micro Focus.
“Today marks a significant milestone for Micro Focus, and I am honoured to be leading this team,” he says. “We are bringing together a powerful combination of technology and talent uniquely positioned to drive customer-centered innovation at enterprise scale — enabling organizations to maximize the ROI of existing software investments while embracing the new hybrid model for enterprise IT.”
According to a recent report published by the Harvard Business Review, “Business leaders anticipate that even more of their applications will reside in various third-party data centres in the near future. But critical legacy applications may not be going anywhere for some time. So orchestrating a mix of systems will become even more critical. Hybrid IT will be the dominant approach – and developing robust hybrid IT capabilities will be a competitive advantage.”
In terms of the transaction, Seattle SpinCo, which holds the software business of HPE that was spun off, merged with a wholly-owned subsidiary of Micro Focus.
“Micro Focus is extremely excited to announce the global spin merger of Micro Focus and HPE Software,” says Gary de Menezes, country GM of Micro Focus Sub Saharan Africa. “This merger will enable both companies to optimise processes and offer a world of opportunity to their partners and customers.”
Micro Focus was founded over 40 years ago with a focus on Cobol — and its Cobol business has tripled in size since 2001, growing at 14% year on year just since the middle of 2016.
This was driven by innovation with Visual Cobol and AcuCobol, which allows customers to move legacy workloads on to modern deployment models such as cloud and mobile.
Micro Focus has in addition, established itself as a global leader in the provision of security solutions, and in South Africa, have successfully achieved reference customer implementations at prominent businesses in both private and public sector.
On the other side, HPE Software made its debut 30 years ago with Data Protector and Network Management, products that are still core today to the business. Both HPE Software and Micro Focus have grown through organic innovation and a series of acquisitions.
“The other element that is critical to our approach going forward, is both companies’ historical performance,” says De Menezes. “Micro Focus has had an incredible track record of financial performance. In 2011, when Kevin Loosemore took over as executive chairman, the company was $400-million in revenue and $834-million in market cap. Since then, the company has executed on a series of acquisitions and organic innovations, creating a company worth $1,4-billion in revenue and $6,7-billion in market cap – that’s a 704% increase in market cap in six years.
“If you look at these numbers relative to other top tech companies, Micro Focus has outperformed companies including Amazon, Facebook and Microsoft.”
De Menezes adds: “This is an industry that is ripe for continued consolidation and we expect to be in a great position to take the helm.
“Micro Focus’ mission is to provide our customers with a best-in-class portfolio of enterprise-grade scalable software with analytics built in. We put customers at the centre of our innovation and build products that our teams can be proud of.
“This mission is simple but powerful and is absolutely at the centre of all we do as we help our customers and partners Discover the New – across our company, portfolio and innovations.
“The spin-merge is upon us and we look forward to what we have to offer our customers and partners going forward,” he adds.