HP takeover bid expands while legacies are stable

Xerox has upped the ante for its bid to buy out HP Inc., the arm of the Hewlett-Packard empire that focuses on PCs, imaging products, and consumer goods. This was the arm of HP that saw its growth dive as customers printed less — and then soon after, shifted computing needs to mobile devices.

Over the last six weeks, Xerox has attempted to purchase this side of HP. Several offers have been tendered to get HP into the fold of the copier manufacturer. Acquiring HP Inc. would be likely to change a lot of choices the HP customers make. Eliminating products wouldn’t be highest on the list, but accommodating the overlap in products is a natural.

After all, Xerox is committed to spending $24 million to take up HP Inc. It hasn’t made much sense to the board of directors at HPQ, as its stock symbol is known. Market valuations are wildly different for HPQ and Xerox (XRX). Stock valuations put HPQ at $32 billion and XRX at a little over $8 billion.

Legacy users of HP-branded products, like MPE/iX or even OpenVMS, can stand by and watch the grappling with some satisfaction. Not because they want to see HP humbled by a takeover, although that’s something that the most disaffected HP 3000 owners wouldn’t mind. It’s not even because the legacy owners would only care about Hewlett-Packard Enterprise, which is not in any danger of being acquired.

The situation for legacy owners using MPE/iX and OpenVMS is simple. They’re never again going to be stranded by a change in a corporate giant’s futures. The HP 3000 ecosystem is now all-independent. The OpenVMS users now care the most about the fortunes of VMS Software Inc. — an entity devoted to nothing but OpenVMS.

As a reference, legacy users can look at the last giant merger from HP, back in 2001. Compaq, the then-owners of OpenVMS, got acquired by a company with a great enterprise history. However, the size of the MPE/iX market, compared to the OpenVMS ecosystem, meant the smaller of the two wasn’t going to get a budget to migrate the OS to the Itanium-Integrity server line.

The next step was the announcement of the end of HP’s MPE/iX fortunes. That’s an outcome for legacy users that will never roll downhill from the high seats of a corporation again. Unless Oracle gets in the sights of some go-getter looking to do a Xerox on them. The latest report is that XRX has got $24 billion in financing commitments from Citi, Mizuho and Bank of America to grab HPQ.

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