HP's Adaptive Enterprise Strategy Leads to Novadigm and Consera Software

2/9/2004 - HP (NYSE:HPQ) announced that it has signed definitive agreements to acquire two management software companies: Novadigm Inc. (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.

"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(1). 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(2) 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:

"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, Inc. "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, Inc. "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:

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.

More information about HP's management software solutions is available at http://www.hp.com/go/adaptive.

About HP
HP is a technology solutions provider to consumers, businesses and institutions globally. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing. For the fiscal year ending on Oct. 31, 2003, HP revenue totaled $73.1 billion. More information about HP is available at http://www.hp.com.

(1) Source: Worldwide Systems Management Software Forecast and Analysis Summary, 2003-2007, August 2003, IDC # 29958, Volume 1.
(2) Source: Worldwide IT Spending, 2002-2007: The Worldwide Black Book, 2003, Sept 2003, IDC # 29930.

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