HP plans to sell off middleware products

Hewlett-Packard Co. is about to sell off its middleware assets and exit the business, looking instead to partnerships to meet its customers' middleware needs, HP executives said Tuesday.

The company plans to "retire" its middleware assets as part of an effort to attain profitability in its software division, Peter Blackmore, executive vice president of HP's enterprise systems group, said Tuesday during a company meeting with financial analysts in Boston. He didn't offer a timeframe for the move but said HP would provide further details by the end of the month.

Asked by an analyst if the plan includes selling HP's Java application server, which it acquired in October 2000 from Bluestone Software Inc., HP Chairman and Chief Executive Officer Carly Fiorina said HP won't provide concrete details until customer transition plans are in place. She acknowledged that the company is "engaged in some partner discussions" about its middleware strategy.

While HP wouldn't say which products it plans to sell off, analysts said shedding its application server would make sense. BEA Systems Inc. and IBM Corp. hold by far the largest share of the market, according to most analyst estimates, and the products themselves are costly to develop, in part because vendors must keep their products in step with evolving Java standards.

Given that, it would make sense for HP to stop developing its own product and offer customers a third-party application server, said Rob Perry, a senior analyst at the Yankee Group in Boston. For customers who favor Java, HP could offer a product like BEA's WebLogic application server, while for Microsoft Corp. customers it could offer an equivalent .Net product, he said.

Another analyst agreed that selling the Bluestone product is a likely move for HP, and also pointed to potential partnerships with Microsoft and BEA.

"I don't know of a specific potential buyer, but I wouldn't be surprised to see HP looking for someone to buy (its application server) because I think ultimately they intend to emphasize their relationships with their key software partners Microsoft and BEA, rather than emphasize their own," said Mike Gilpin, a research fellow with Giga Information Group Inc., in an interview Monday.

Application servers provide a platform on which developers can build and deploy a variety of applications, for both internal functions such as payroll and external applications such as commerce and inventory software. They have become an integral component in the evolution of Web services, providing support for standards like XML (Extensible Markup Language) and SOAP (Simple Object Access Protocol).

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