HP to Accelerate Adaptive Enterprise Strategy

HP to Accelerate Adaptive Enterprise Strategy with Acquisition of Novadigm and Consera Software

HP (NYSE:HPQ) today announced that it has signed definitive agreements to acquire two management software companies: Novadigm (NASDAQ:NVDM) headquartered in Mahwah, N.J., and Consera Software, based in Bellevue, Wash.

Upon close, each will add powerful automation capabilities to the HP OpenView software portfolio for unified management of the complete enterprise IT environment.

HP, Novadigm and Consera executives will host a conference call on this topic at 10:30 a.m.

EST today.

"Management software is the next big frontier for IT," said Nora Denzel, senior vice president, HP Adaptive Enterprise.

"Consider over $8 billion spent last year by the industry on mergers and acquisitions and IDC's projected worldwide management software revenues of $10.1 billion by 2007.

It's clear that the race is on to deliver CIOs the automated, integrated management solutions they need to increase agility and capitalize on change.

"Novadigm and Consera will add powerful automation software to HP OpenView, enabling customers to flex IT with business demands.

Together, they put repetitive, error-prone IT management tasks on cruise control and free up IT time to focus on innovation." IDC estimates that companies spend nearly $174 billion on ongoing operations and management of their existing IT infrastructure.

Over the past six months, HP has acquired critical management software capabilities aimed at helping companies reduce these costs and become more adaptive by streamlining the management of the IT resources that power their enterprises.

In September 2003, HP acquired both Talking Blocks for Web services management and Baltimore Technologies' Select Access business for identity management.

In November 2003, HP acquired Persist Technologies for information lifecycle management.

Once closed, today's acquisitions will add key components to the HP OpenView line:.

Novadigm provides software to automate change and configuration management.

Novadigm's technology automates the standardized deployment of IT changes in a mixed environment to achieve a desired, consistent end state.

It also automates configuration managements, ensuring IT resources deliver on established business policies, and that the right software is automatically in use on the right systems.

Consera's IT service-modeling software helps customers design a standardized IT environment that automatically adapts to changing business demands.

"HP's move to combine Novadigm, Consera and OpenView is the next logical step in its journey towards helping enterprises become more adaptive and efficient," said Rick Sturm, president, Enterprise Management Associates "It should give HP a significant advantage against competitors." "Truly adaptive solutions must be capable of allocating infrastructure on a dynamic basis in response to changing patterns of utilization," said Ronni Colville, research director, Gartner "It's increasingly important for technology to be able to take automated action based on business needs to drive policy-based reprovisioning and reconfiguration of resources across servers, databases, storage devices, network devices, application and end-users." Automating management of enterprise IT resources Increasingly, enterprises need to automate the management of IT environments.

In a typical Fortune 500 company, the IT department relies on system administrators armed with manual processes and a collection of tools - many developed in-house - to keep its systems up and running.

Yet most enterprise system administrators can usually manage only 20 or 30 servers at a time, forcing companies to augment their staff continually when adding capacity to data centers.

As a result, enterprise IT managers are shifting from "point" management of their environments to integrated, automated management solutions.

HP intends to leverage Novadigm's proven technology, Consera's leading-edge technology and the breadth and depth of the HP OpenView management software suite to meet this demand.

Consera's technology will allow HP OpenView customers to create models that represent their business services, mapping to underlying IT components.

Novadigm's automation services will then utilize these service models to automate IT changes, such as new software implementation, patches or upgrades.

The combination will make it easier for IT departments to manage IT resources based on pre-established policies according to a consistent desired state.

HP was attracted to the combination of the Novadigm and Consera software technology because:.

Novadigm has garnered the leadership position in the automated change management software market;.

The heterogeneity of the proposed combined solution will cut across development and application platforms, operating systems and hardware vendors;.

The technology is highly complementary to the current HP OpenView management software portfolio, as well as HP's services offerings based on the HP IT Service Management Reference Model;.

Automated management capabilities, in conjunction with HP's portfolio of virtualization solutions, will provide customers even greater efficiencies, utilization and return on IT investment; and.

Open, automated, change and configuration management, the core focus of these acquisitions, is a critical element of HP's vision to help enterprises become more adaptive.

Under the terms of the Novadigm acquisition agreement, HP will pay $6.10 in cash for each outstanding share of Novadigm common stock.

The Novadigm and Consera acquisitions are subject to the approval of each of their stockholders and various standard closing conditions.

The transactions do not require approval by HP shareowners.

Upon completion of the transactions, expected during the next several months, Novadigm and Consera products will be available through HP OpenView software channels and the technology will be leveraged across HP's Technology Systems Group, Customer Solutions Group and Consulting and Integration Services.

Following completion of the transactions, both the Novadigm and Consera technology and businesses will become an integral part of HP's Software Global Business Unit.

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