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September 9, 2016

HPE Sells ‘Non-Core’ Software, Including Big Data, to Micro Focus

George Leopold

As at least one competitor gets bigger, Hewlett-Packard Enterprise (HPE) got smaller this week with an $8.8 billion spinoff and merger of its software unit with staid software vendor Micro Focus.

HPE (NYSE: HPE) and Micro Focus (LSE: MCRO.L) also announced plans this week to form a partnership that will name the U.K.-based vendor’s SUSE unit as HPE’s preferred Linux partner. The move combines HPE’s Helion OpenStack and Stackato platforms with SUSE’s OpenStack distribution.

HPE’s “non-core” software assets involved in the deal include its application delivery management, big data, enterprise security as well as information management and governance platforms. In shedding those assets, HPE said it would sharpen its focus on providing hybrid IT infrastructure for running datacenters while bridging them to multi-cloud environments.

The deal also provides HPE with “dry powder” in the form of more than $5 billion in net cash it expects to use for other deals as competition stiffens in the hybrid IT infrastructure market. The competitive landscape shifted again earlier in the week when Dell and EMC Corp. closed their merger deal to create privately held Dell Technologies.

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