Thin client growth drives HP’s acquisition of Neoware

Although Hewlett-Packard Company (HP) announced the acquisition yesterday of Neoware Inc., a thin client computing and virtualization solution provider, it remains uncertain how the company will eventually handle both its and Neoware’s channel partners.

HP was driven towards a merger with Neoware to help boost its thin client market share and customization capabilities and to help expand its solution portfolio. Under terms of the acquisition agreement, HP will purchase Neoware at a price of US$16.25 per share. While still waiting for approval with regards to closing conditions, HP is expecting to close the deal sometime within the fourth quarter of this year.

Kevin Frost, vice-president of business desktops in the personal systems group at HP, said the thin client market, in which Neoware plays, is an attractive one for HP.

“Neoware does a great job of providing customization capabilities to large enterprise customers,” said Frost. “The two companies have great synergies and what (Neoware) brings forward are Linux assets, capabilities, the ability to do custom images and software assets that we (can) wrap around our hardware.”

According to HP, thin computing has been a fluctuating trend in the industry. Rod Hardman, solution business manager for remote client solutions at HP Canada, said there is an increasing focus on cost reduction and increased manageability. With thin computing, Linux software is utilized which allows for reduced overall maintenance costs and increased levels of security.

With the pending merger between the two companies HP maintains it wants to keep the transition as simple as possible for partners and customers.

“Our focus near term is to take care of the customers that Neoware and HP have to make sure this transition works,” Frost said. “We’re forming teams right now on the HP side that will be working with the channel…all around the world.”

While no definite partner programs and plans have been made yet, HP said with the deal not expected to close until the fourth quarter there’s lots of time to work out the details.

“We’re interested in the reseller community that can provide our customers with additional value,” Hardman said. “I anticipate that all partners will be dealing directly with HP; however it’s not for certain yet.”

Hardman added he anticipates HP will maintain a balanced strategy that includes the channel.

“We see this balance today and we see this continuing to exist,” he said. “When it comes to our channel programs, we will look at things case by case and we will then determine what will work based on best of breed practices for our partners.”

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Maxine Cheung
Maxine Cheung
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