Accelerating Quality for Digital Enterprises

Enterprise Software Possibilities Opens Up with the HPE Micro Focus Spin-Off


The Big News from a Software Giant

In early September, HP spun off its enterprise software business to Micro Focus International in an $8.8B deal. Considered as one of the largest deals in Silicon Valley’s history of spin offs, HPE will be spinning-off application delivery management, big data, and enterprise security software. The business services division was spun-off to CSC for about $8.5B few months ago.

The spin off leads to many challenges and opportunities, and the implications of adding application delivery and other offerings to Micro Focus’ portfolio needs to be investigated, especially since we are in the software business.

Although the reason for this spin off is stated as ‘non-core’ products for HP, that might not be the case for Micro Focus. But, how Micro Focus will chart the growth of these products under its umbrella will be an interesting turn of events.

Implications for the Rest of the Software World

There will be quite a few routes that HP Enterprise Software customers can take in the light of this spin off. But first, let’s evaluate the market landscape and we being QMetry, we would like to focus on the testing tool market. I didn’t have to say that.

According to Gartner, the testing tool market is standing at $1.5B with a CAGR of over 5%. HPE is the dominant leader with over 750M followed by IBM at around 200M and Oracle at about 100M.  HPE’s Quality Enterprise business which stands at 750M is part of the overall Application Delivery suite and will be spun into the Micro Focus stack. While some customers might be evaluating a transition plan following an easier to stay than switch mindset, there might be a few falling off the rails and looking for alternatives which are less expensive and more innovative.

Gartner has provided a great implications report on the future of HPE customers and what they should be looking out for. Some of the things they mention explicitly are:

  • The need to create a migration plan and identify options.
  • The need to monitor the long term investment plan and the future under Micro Focus which will be unknown for a little bit.
  • The need to be perceptive about existing HP investments and create competing products. HPE has invested a significant chunk in Big Data and Analytics businesses and they are ripe for growth if Micro Focus expands investment in these products and product marketing.

What Does This Mean for QMetry and other Testing Tools?

This means opportunity! Of the 750M that’s invested in enterprise software testing tools (both manual and automation), there might be quite a bit of fall over from HPE as the transition happens due to challenges in migration. We don’t know the exact number yet, but it would mean opportunity for test management and automation players to button up their tool stacks and support the shifting demand.

Key opportunities:

  • There is a significant amount of business which is still manual. Enterprise softwares are still crossing this chasm and trying to figure out how to automate and which tool stack to use. This might be a great lead in for automation tools to reposition themselves for HP customers and offer more innovative and less expensive solutions, as well as a chiseled path from exploratory/manual testing to automation ideologies.
  • There is room to get in and become disruptive with some of the technology especially as it relates to analytics, predictive intelligence and big data, with a focus on $750M as the size of the market. Gartner identifies this as the biggest untapped opportunity and as the biggest ‘value’ to a business as we chug along to digital quality driven by intelligence.
  • There is a scope to rethink integrations – integration with analytics tools, with solution partners and cognitive tools like IBM Watson to create an ‘intelligent’ system.

Software is going to eat the world. The smarter you are in catching the nuances and tap your customer’s and prospect’s pain points and adjust your strategy, the easier it will be to emerge as a leader in the ongoing world of acquisitions, spin offs and buy outs.

At QMetry we are innovating! Whether it’s test management, test automation or test intelligence, QMetry has a solution for all digital enterprise softwares trying to solve the digital quality problem with an organized product suite. You will be hearing a lot more from us on how we’re positioned to transform digital quality in 2017.



















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