H.P. Making 2 Purchases to Push Data
Matt Richtel
Hewlett-Packard said it had agreed to pay $1.6 billion for software maker Opsware, giving a hefty payoff to Opsware founder, Marc Andreessen.
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SAN FRANCISCO, July 23 — Hewlett-Packard said Monday that it had agreed to pay $1.6 billion for Opsware, which makes software to update corporate servers automatically, a deal that promises a hefty payoff to an Opsware founder, Marc Andreessen.

Mr. Andreessen, the Silicon Valley serial entrepreneur who helped start the browser maker Netscape Communications, owns about 10 percent of Opsware, offering him a payday of around $160 million from the cash transaction.

The acquisition, for $14.25 a share, is at a premium of nearly 40 percent to the company’s closing price on Friday of $10.28.

Shares of Opsware, based in Sunnyvale, Calif., closed on Monday at $14.

Hewlett-Packard, of Palo Alto, Calif., also announced that it was buying Neoware, a thin-client computing company, for $16.25 a share, in a deal valued at $334 million. A thin client computer is managed and controlled remotely by centrally managed servers, instead of by software on the machine’s hard drive, as a PC is operated. Neoware is based in King of Prussia, Pa.

The two acquisitions are intended to bolster Hewlett-Packard’s aggressive efforts to sell big corporate customers energy-efficient data centers that can operate with fewer people. Last year, it bought Mercury Interactive, which manages hardware in data centers, for $4.5 billion.

Ann M. Livermore, Hewlett-Packard’s executive vice president in charge of selling hardware, software and services to large corporations, predicted that companies would spend $130 billion this year setting up, running and tending to their technology infrastructure. “Every company in the world wants to automate and take the complexity out,” Ms. Livermore said.

Mr. Andreessen said corporate data centers were entering an era analogous to the shift by manufacturers to highly automated factories that needed fewer workers.

“If you’re running a few servers, you can do it by hand,” he said. “If you’re running tens of thousands, you can’t.”

George Hamilton, an enterprise software industry analyst for the Yankee Group, a market research firm, said corporations were becoming more interested in automating large data centers known as server farms because the centers are growing in size and they are being asked to do increasingly complex tasks.

“There’s much too much going on to do manually anymore,” he said.

Benjamin Horowitz, another Opsware founder, will move to Hewlett-Packard to run the division overseeing the new acquisition and other server automation technology, Ms. Livermore said.

The deal is the culmination of a considerable turnaround for Opsware and Mr. Andreessen. In 1999, Mr. Andreessen and several Netscape colleagues founded Loudcloud, the precursor to Opsware. Loudcloud initially took off, but its fortunes followed the dot-com boom and bust.

By 2002, the company was forced to refocus on software automation and it renamed itself Opsware. Mr. Andreessen said Opsware now has more than 350 customers, including Hewlett-Packard, JPMorgan Chase, Home Depot, General Electric and Microsoft.

In a celebratory posting on his blog Monday morning, Mr. Andreessen said Opsware’s stock price had risen exponentially since October 2002. “Everyone who bought and held stock in Loudcloud or Opsware in the public market at any time made money.”

Mr. Andreessen made several hundred million dollars when Netscape was sold to America Online in 1998.