HP will buy or merge? -ZDNet (blog)

Christopher Baum, throws at Software advice, a look at 14 potential acquisition targets.

HP & mergers acquisitions: who is next?

I disagree with some of the choices in particular are top choice: SAP.

Buying SAP is not a good strategy. IBM HP could tell why this is a bad idea.

Wall Street analysts have written many reports over the years about IBM SAP buy and what a great move that would be. When I worked in the Financial Times my editors would always ask me IBM CEO Sam Palmisano of Steve Mills, head of IBM's Software business, questions about buying juice.

I am not asking them that because I knew that it would have been a missed call. I knew it was not in IBM's plans.

In one of my earlier interviews I had spoken with Steve Mills on the Software group and about some of its strategic errors. One of these was to try and get in the business enterprise applications. IBM lost a lot of money in the 1990s trying to sell his own software of the company for attracting and focusing on middleware.

But IBM salvaged some wisdom from that experience, as expenditure in the Lake shifted to services; IBM realized that could make much more money services around enterprise software to sell.

For every $ 1 that license revenue, SAP receive, companies spend about $ 9 in services: installation, integratopn, operation systems, management. SAP and IBM WINS huge contracts and thus 9 times juice of revenue can be posted. Why buy the business? You can grow faster in services revenues.

Why does HP SAP buy when the best part of the company outside of SAP?

The best part is in all services need to build and use the software. SAP itself tries to get more of that lucrative market.

That's why IBM has expanded its IT services business in the past ten years because there are a lot of money in services.

TIBCO Software

There are several companies that are not on the list, such as Mr Baum Tibco Software, useful in the same neighborhood as HP HQ and with lots of high-margin software and services revenues.

Also, how about a merger with Oracle?

An Oracle + HP combo would be very impressive. On the contrary, it would be an Oracle Sun + HP combo. Would it can match IBM in almost every major category the and services.

Mark Hurd, the former CEO of HP now works with Oracle, so that the integration would be easier.

Larry Ellison would spin off HP's PC and printer business, and then acquire the following Salesforce CRM and Oracle CEO: Marc Benioff. Perhaps.

HP [HPQ] is trading at $ 42.61, almost $ 10 under $ 52.35 a year ago. HP has a market capitalization of $ 90.5 billion.

Oracle [ORCL] stock price has strong growth in the last six months, move of $ 25 to $ 31.38.91 at the end of the markets Monday. Oracle has a market capitalization of $ 159.6 billion.

Tom Foremski reports on the business and culture of Silicon Valley at the crossroads of technology and media.

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