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WRQ's Reflection goes deeper into coffers

Micro Focus logoNews came to me today about the Sept. 15 deal between Attachmate and Micro Focus. Two of the larger enterprise software makers which matter to 3000 vendors, the connectivity company and world's biggest COBOL vendor, will be doing a merger. With this, the consolidation of enterprise vendors takes another step into its future, and Reflection goes deeper into another software corporation's coffers.

Below is some of the story as told by Micro Focus, in a message to its clients and customers, about a $1.2 billion all-stock deal that leaves Micro Focus owning 60 percent of Attachmate.

Our intention is to preserve the full portfolios of strong, leading products in both Micro Focus and Attachmate going forward. We will draw on our recent acquisitions’ track record of successfully integrating any overlapping product sets.

Business logic and data that lies at the heart of operational effectiveness is increasingly exposed to very complex IT environments, as well as recent technology developments such as the cloud, mobility and virtualization. The combination of Micro Focus and Attachmate creates a leading technology company that will be well positioned to give organizations the ability to exploit the opportunities these trends produce whilst also leveraging prior investments and established IT assets to effectively bridge the old and the new.

For those who are counting up what kinds of products will be preserved -- in addition to the Reflection line -- the merger also brings Novell, NetIQ, and SUSE Linux under the control of Micro Focus. It would take some detailed calculating to figure the total number of products being preserved. But more than 200 in the portfolio would not be an errant guess.

This sort of reverse takeover is popular for merger deals today. JDA pulled the same sort of strings when it acquired Red Prairie early in 2013. It's billed as a merger, but the terms are not equal ownership once the deal has been approved. Shareholders of both of these companies still must approve this reverse deal, but Micro Focus is already announcing the transaction is expected to close on November 3.

Regulatory approval is required for this merger, but that won't include much regulation from the customers of the Attachmate product set. Micro Focus has absorbed a 3000-related vendor before. The company bought Acucorp, makers of AcuCOBOL, outright in 2007. The complier, for a short time, had MPE COBOL II awareness and was positioned as an upgrade to the HP-built COBOL II. Then HP announced its 3000 exit strategy, and the ranks of COBOL vendors for MPE got shorter.

It can take years to discover what might become of a product vital to an HP systems manager, software that's been acquired this way. AcuCOBOL, which had a cross-platform prospect before HP's exit activity, is still in the Micro Focus price list. (Well, maybe not as AcuCOBOL anymore. Following Acucorp's lead, it's now called extend. But it's been in, and then out, and then back in favor for COBOL futures. The last in-person report we heard was in 2009, when an AcuCOBOL rep told the HP 3000 faithful at the Meeting by the Bay that his compiler was on the rise again -- or at least no longer falling.

The definition of coffer includes strongbox, money chest, and casket. In the first, the Reflection products would be tucked away safely and receive whatever development they could earn. In a world where much of IT connection takes place over the Web, a standalone terminal emulator is going to have restricted earning prospects.

The ideal for customers would be Reflection to become a money chest through the increased sales opportunity that Micro Focus might supply to it. We can pause for a moment to consider how often this has happened for acquired products. In the JDA instance, some Red Prairie product managers were no longer on the scene, post-reverse takeover. Rightsizing operations drives the shareholder approval of these things. There's an Attachmate sales force, and there's the products. Only the latter is certain to survive beyond this first year.

The casket is the kind of option where a software vendor's assets -- developers, locations, and cash -- are the prize in the deal. This seems unlikely given the size of Attachmate. This deal was big enough that Micro Focus chose a reverse-takeover approach. But Reflection didn't have the same profile at Attachmate as when WRQ sold itself to Micro Focus. Within a couple of years, the company called AttachmateWRQ became simply Attachmate.

Reuters reports that the owners of Attachmate are four asset management firms: Francisco Partners Funds, the Golden Gate Funds, the Thoma Bravo Funds and the Elliott Management Fund. Golden Gate bought up Ecometry long ago. By now, after its addition of the products of Novell et al, Attachmate is owned by a parent corporation called Wizard LLC. 

Terminal emulation to HP servers doesn't require much wizardry these days, but the Reflection product does understand the NS/VT protocol for MPE/iX. There's sure to be someone in Seattle who's in charge of that this week, and probably beyond November 3, too.