Open Letter from Pat Durbin, CEO of Planview, regarding the Hewlett-Packard acquisition of Mercury Interactive

on 25 July 2006

The Hewlett-Packard acquisition of Mercury Interactive continues to concentrate IT Performance Management solutions (Mercury IT Governance Platform) in the realm of the IT Infrastructure vendors. We at Planview do not believe this approach is in the best interests of IT organizations and their leaders.

Successful IT Leaders Focus on Business Demand, not IT Supply The major complaint about IT organizations is their lack of alignment with the goals of the Business and the lack of transparency in the technology decision-making process. Successful CIOs understand that they need to be an innovation partner with the Business and communicate the value of technology in business terms. These IT leaders align themselves with the Business Demand in comparison to the IT Supply.

The Conflict of Interest within the IT Infrastructure Supermarkets The IT Infrastructure supermarkets – CA, HP, IBM, etc. – have spent decades developing products to support the IT supply-side. This is their #1 focus, and it will remain so indefinitely. In the case of Mercury, the testing business is clearly a supply-side business, while ITG offerings are on the demand-side. With every portfolio management acquisition, the need for a demand-side solution is getting lost in a sea of supply-side tools.

The result of all this is that at a time when alignment with IT demand is the #1 priority for the CIO, supply-side vendors are diluting the viability of the demand-side offerings by burying them within their classic IT-operation-centric product lines.

Supply is Under Commoditization Pressure Ironically, this supply-side focus is accelerating at a time when IT operations and service delivery are becoming increasingly commoditized. Most modern organizations see themselves as a virtual unit that is not defined by space, time and organizational reporting lines. This trend has made the supply of IT services a primary opportunity for cost reduction via outsourcing, near-shoring or off-shoring. Successful CIOs understand that their performance is dependent on the business units seeing them as a trusted partner to offer the best quality at the lowest cost.

Why Best-of-Breed Makes Sense for the Demand-Side of IT A better approach for the CIO is to create a clear separation between Business Demand and IT Supply, and to then optimize the organization’s demand-side capabilities (people, processes, and tools). Demand after all drives supply, and not the other way around.

Benefits of this approach include:

• Ensuring the best demand-side processes and solutions are established. This is the strategic imperative and should not be bundled into a supply-side contract renewal as some kind of afterthought.
• Avoiding even the impression of a bias to internally supplied IT services managed by the IT supply-side tools.
• Partnership with solution providers uniquely qualified and focused on the demand-side challenge. This challenge is a business-centric issue, not an IT operations management issue.
• Remember that there are significant technological developments on the near-term horizon that question the need for the single vendor, integrated suite (SOA, Web Services, etc.).
• Ensuring a healthy vendor portfolio. Although it is tempting to one-stop-shop, this approach eventually consolidates power with vendors and limits customers ability to innovate.

Planview’s Position on the HP Mercury Merger Over the past several years infrastructure vendors from IBM to Compuware, and CA have been buying portfolio management vendors. It is very possible that the HP/Mercury deal is rooted in the Mercury testing business (supply), but along with it comes the Mercury IT Governance (ITG) product line (demand).

While HP will not be changing the direction that Mercury was going, the acquisition continues to concentrate IT Performance Management tools within the IT Infrastructure vendors. We at Planview do not believe that approach is in the best interests of IT organizations and their leaders. About Planview

Since 1989, Planview has been a market leader and trusted partner focused solely on delivering comprehensive portfolio management solutions. By applying a portfolio management discipline to projects, strategies, and services, Planview Enterprise™ enables IT and business executives to drive innovation and improve performance across the enterprise. Industry leaders such as Citigroup, Reuters, EDF and the US Department of Transportation, partner with Planview to achieve their strategic business goals. Headquartered in Austin, Texas, Planview is privately held and has been profitable for well over a decade. www.planview.com Planview Enterprise and PRISMS are trademarks of Planview, Inc. All other product and company names may or may not be trademarks or registered trademarks of their respective owners.