Tibco Seen As Failed Target Of HP Acquisition

It's common knowledge that Hewlett-Packard is looking to bolster its enterprise software portfolio, but you don't often get wind of acquisitions until they're done.

Reuters gave observers a peek behind the scenes on Tuesday, reporting that HP had recently taken a run at Tibco. The talks broke down about two weeks ago, according to two unidentified sources cited by Reuters and said to be close to the talks.

HP and Tibco told InformationWeek they couldn't comment on the report (which one HP executive described as "rumor and speculation"). But the very mention of Tibco as a target speaks volumes about the kind of software HP is after. Tibco would quickly give HP enterprise-grade integration software used by big financial institutions including Citibank Asia, big airlines including Delta and Air France, and big energy and utility companies including ChevronTexaco.

Tibco has been an HP partner for integration and services-oriented architecture software for more than a decade. Tibco favors HP's hardware platforms, particularly for Unix-based deployments of its software. Tibco product lines involved in the partnership include ActiveMatrix system integration, composite application development, and governance software; iProcess Suite business process management and optimization software; and Collaborative Information Manager master data management software.

A deal with Tibco would have helped HP compete with IBM, the company Tibco always identifies as its biggest competitor. Despite Tibco's comparatively small size -- $754 million in revenue in 2010 versus just under $100 billion for IBM over the same period -- the company has managed to grow consistently and profitably. Oracle is also a Tibco competitor, though that rivalry isn't as strong as Tibco's with IBM.

With Tibco, HP would have answers it lacks to various IBM WebSphere middleware and InfoSphere information management products. Tibco also has high-performance event-processing technology widely used by financial trading firms, and it acquired analytics and data visualization player Spotfire in 2007. There, too, HP can't offer alternatives.

If HP is now shopping for other companies, as Reuters' report suggests, Software AG and Progress Software are both potential targets, given their integration, SOA infrastructure, and business process management software. Software AG is larger than Tibco, with about $1.4 billion in revenue last year. Progress is smaller, at $529 million in 2010 revenue.

Tibco's event-processing and analytics technology might have complicated HP's relationship with SAP, which competes with Tibco on two fronts: SAP's Sybase unit has capital markets customers that use Sybase Aleri event processing technologies; and SAP BusinessObjects and Tibco Spotfire both offer in-memory analytics and data visualization.

As HP recently demonstrated with its plan to add the WebOS operating system to PCs and mobile devices, the company doesn't appear to be too worried about a little coopetition with partners. HP’s WebOS move is surely a thorn in the side of Microsoft.

If a takeover deal with Tibco was nixed, it was likely a matter of money rather than competitive concerns. Having founded the company in 1997, Vivek Ranadivé, Tibco's respected chairman and CEO, would surely not give it up at a bargain price.

If HP's aim is to throw its weight around in enterprise software, it's inevitable that it will start bumping into friends and foes alike.