What's next for Micro Focus?

What's next for Micro Focus?

After closing the spin merger with HPE software business

Micro Focus has doubled its size with the acquisition of Hewlett Packard Enterprise's software business assets and is now on a mission to get the partner community educated about who, and what, the combined entity has to offer.

In 2014, the $450 million business acquired a company twice its size, the software vendor, Attachmate Group, tripling in size overnight.

Micro Focus then became a $1.4 billion company with more than 4,500 employees, more than 5,000 partners operating across more than 30 countries and a customer base of 20,000.

Following the completion of its spin-merger with HPE's software business at the beginning of September, the now $4.5 billion provider has 40,000 customers around the world, and is one of the seven largest software companies globally and the second largest software company in Europe.

The organisation is currently introducing the new business to partners and customers in roadshows that are seeing roughly 70 per cent of the audience made up of HPE partners, with the other 30 per cent of attendees made up of Micro Focus partners, according to Micro Focus Asia Pacific and Japan president, Stephen McNulty.

McNulty told ARN that customers and partners are largely interested to know things such as the reasons why Micro Focus acquired the HPE software business in the first place, what products they can absorb, what they can do with the HPE products, and what is complementary to existing Micro Focus products.

“Eleven days ago we were a $1.4 – $1.5 billion company," McNulty told ARN. "We are about $4.5 billion dollar company and we got 18,000 employees, so we got a massive change in terms of scale and product portfolio."

According to McNulty, partners don’t need to worry about the portfolio of products they are currently selling, the security portfolio from HPE, for example, is different and complementary to Micro Focus’ own palette of offerings.

McNulty revealed that the one area where there is some overlap is in the software development and testing portfolio. However, he said that in Micro Focus’ long history of mergers and acquisitions the company has never stopped providing support to any product.

“So we’ll continue to take both of those products to market and then, through development efforts, add the best of one to the other and vice versa,” McNulty said.

Both companies will continue to operate independently in order to not disrupt HPE's financial reporting year, which ends on 31 October.

In May, HPE Australia started the process of transferring staff from its software business to a new entity in relation to the spin-merger. McNulty said that the total number of HPE Australian staff being transferred is close to 280 people. Now, both businesses combined have more than 350 employees in Australia.

Stephen McNulty - President of Asia Pacific, Micro Focus
Stephen McNulty - President of Asia Pacific, Micro Focus

A total of 12,000 employees worldwide was expected to be transferred to the new business which now employs 18,000 people, with 3,500 operating in the Asia Pacific region.

Partners expectations

When the companies merged, Micro Focus had 20,000 customers and HPE around 30,000, with roughly 10,000 common customers between both organisations.

The same takes place in the partner ecosystem where some distributors and partners were already working with both vendors.

That is the case of NEXTGEN in Australia and New Zealand, as the only master distributor across both vendors in the local region.

This unique position has given the distributor the ability to add value to both businesses prior to the acquisition and to help facilitate the merger and partner discussion in the lead up to and during the merger.

A NEXTGEN spokesperson told ARN that the distributor has been getting the channel up to speed on “the value they can drive out of the new organisation with NEXTGEN”.

Looking ahead, NEXTGEN is expecting significant interest from new partners as well as interest and enquiries from existing partners and their customers of both former organisations, seeking to learn about the respective product offerings, and the complementary nature of the combined product offerings.

The distributor also revealed that the merger will impact its business with new cross-sell and upsell opportunities into former HPE and former Micro Focus partners and accounts.

NEXTGEN also expects that a new combined partner program will drive efficiencies and synergy in approach and improved outcomes.

This is part of the company’s plan, as McNulty told ARN, with the company planning to bring the best of both programs together in the near future without demoting any partners from their existent partnership level.

“Former HPE partners are excited about the HPE product portfolio being part of a pure-play, software-focussed organisation that understands software R&D, and the software business intimately, and who will drive new value through and out of the fantastic software assets owned by the new Micro Focus,” the HPE spokesperson told ARN.

“Former Micro Focus partners are interested in understanding the new HPE products, and how they can potentially expand their business into the new product areas, and the new opportunities and cross-sell/upsell this generates.”

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Tags softwaremicro focusNextgenHPE


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