HPE may be about to divest itself of software division

Hewlett Packard Enterprise (HPE) may be about to sell off its software division, which would enable the vendor to focus on its networking, storage, data centre and services businesses.

A Reuters article indicated sources told the news organization that HPE is currently in talks to sell its software division to Thoma Bravo. The sources also revealed that HPE was hoping to rake in US$8-10 billion from the sale, but the current highest bidder has offered US$7.5 billion.

According to the Reuters article, Thoma Bravo isn’t the only company to have made offers for HPE’s software division. Others include Vista Equity Partners Management LLC, Carlyle Group LP and TPG Capital LP. The process of selling the software division is being managed by Goldman Sachs Group, the article noted.

Channel advisory firm ChannelE2E’s Joe Panettieri noted in a blog post that HPE’s sale of the software division would reinforce the current leadership’s strategic vision around next-generation data centre infrastructure. According to ChannelE2E, details of the deal may have been finalized over the weekend, which means an announcement regarding Thoma Bravo’s acquisition of the software division could happen at any time.

HPE’s software division isn’t living up to expectations. Compared to other business units, it’s seriously under-performing. As ChannelE2E noted, the former HP spent billions of dollars in acquiring software companies over the last decade, but the software organization has struggled as delivery has shifted more to subscription-based models. Its worldwide sales were US$3.6 billion in 2015 — down from US$3.9 billion in 2014.

Reports indicate HPE has been investigating the sale of the software division since July and has received several offers.

Its software division could end up in good hands. Thoma Bravo has made some significant investments in major technology companies previously. It’s part owner of SolarWinds and helped to drive the vendor’s acquisition of LogicNow. Thoma Bravo is also a major investor in LANDesk and is helping to refocus the company on mobile apps, ChannelE2E noted.

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Jim Love, Chief Content Officer, IT World Canada

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Chris Talbot
Chris Talbothttp://www.christalbot.com
Chris is a freelance technology writer that resides in the Northwest Territories. A former editor at ITWC, he now spends his time as a scribe for various tech publications while having an appreciation for the finer things in life - namely beer and cigars.

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