Storage Soup

Jul 26 2007   4:11PM GMT

Storage analysts scratch their heads over HP / Bull rumors

Beth Pariseau Beth Pariseau Profile: Beth Pariseau

It is being widely reported that HP is in “advanced talks” to buy Bull SA, a French IT integrator. The reports, originated by a French website, capital.fr, contain detailed information about the potential price of the deal (approximately $1 billion US) and have been reprinted by sources including CNNMoney.com and Reuters. HP declined comment on the rumors.

Bull, whose major shareholders include the French government, has a storage business unit, though it’s mostly a channel/storage integration play. The company also deals in other IT products, including servers and networking equipment, and has a customer footprint mostly in French government as well as a few overseas state and local government agencies, according to storage industry analysts.

Otherwise, analysts said, they’re mystified at the potential merger. “HP would have an interesting job on its hands getting a sleepy company to wake up,” said Arun Taneja, founder and analyst for the Taneja Group.

The company underwent a restructuring at the turn of the millenium, refocusing itself on channel sales and systems integration. However, despite attempts to penetrate US markets since, 80 percent of its revenues come from Europe, with a full 40 percent from France alone. Prior to its restructuring, Bull had gotten into the business when it purchased Honeywell, a mainframe and minicomputer manufacturer that was ultimately left behind by the advent of the PC. (It’s a story similar to Digital Equipment and Wang, which went the way of the dinosaur when they couldn’t compete with IBM, Sun et al).   

“I can’t see what’s in [a potential acquisition] for HP other than the acquisition of a customer base for servers and storage,” said John Webster, principal IT advisor with Illuminata, Inc.

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