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Lights-out Mercury & OpenView

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During last week’s HP Software conference in Brisvegas, the business unit’s marketing chief David Gee, made no secret of the intention to “sunset” the strong OpenView and Mercury brands in favour of a more generic “HP Software” brand.

This comes as a surprise from a company that still hasn’t sunset the legacy Compaq PC brand some five years after its acquisition.

There’s no doubt both OpenView and Mercury had built up a respectable level of brand equity for themselves. OpenView became synonymous with management software and Mercury has the app testing mindshare. For example, at least two customers speaking at the event continuously said “Mercury’s…” when referring to one of its (now HP’s) products.

With all the multi-billion dollar acquisitions in the enterprise software space we’ve seen over the past few years it certainly raises questions as to the true value of a company’s brand. There are two things to consider here:

1. The amount of money being tossed up for enterprise software companies has been nothing short of astronomical (HP dropped $4.5 billion for Mercury). This is driven in part by the strength of the brand.

2. With such high prices being paid, will sunsetting the brand irrevocably dilute the value of the software assets acquired?

Regarding point 2, a good example of a company wanting to retain the strength of an acquired brand is seen with EMC’s purchase of VMWare. The VMWare brand has a footprint on everything from the prosumer to tier-1 enterprise and carrier markets. Would any CMO worth his or her arse even think about sunsetting VMWare? EMC has held on to the strong (perhaps even stronger than EMC) VMWare brand and tacked on a tag of “A division of EMC” or something like that. With an acquired brand kept alive, so is the prospect of selling it off as a unit again.

The other extreme is Oracle’s relentless absorption of competitors in its space. Brands like JD Edwards, PeopleSoft, Siebel, and possibly Hyperion are now just Oracle’s “project fusion”. Too bad if they were actually worth something.

While I understand fully HP’s decision to direct its marketing efforts to creating a generic HP Software brand, it will be very interesting to see whether “sunsetting” really means complete removal of its two strongest software brands or whether it will mean demotion to “HP Software -> Mercury testing products”, as history showed us with Compaq.

If HP Software is prepared to go it alone and leave its big brands behind, it will want be doubly sure it can generate the same level of market awareness for those families of products.

Demoting a brand is one thing, wiping it off the whiteboard altogether is another.

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