Mercury Interactive

» see mercury.com as it lived, on the wayback machine

~ the goodbye ~

Fifty-two dollars a share, in cash, about $4.5 billion in total. HP sent the release out of Palo Alto on 7 November 2006 and called it the largest software acquisition in its history. The offer for Mercury's shares had closed six days before that, on 1 November, with roughly 85.7 million tendered, about 96 percent of the company. The merger step took the rest of that week, and when it finished there was no Mercury Interactive. There was a new division called HP Software.

Arye Finegold founded the company in 1989. His two co-founders were Zvi Schpizer and Ilan Kinriech, and while the head office sat in California the engineering weight was in Yehud, Israel. What they sold was testing: LoadRunner to throw thousands of simulated users at a system and see where it buckled, WinRunner and later QuickTest Professional to click through an application the same way every night and flag what changed. None of it was something you would ever install at home.

By the end of 2005 it was the biggest the company would get and already coming apart. The annual report filed the following year put total revenues at $843.1 million, up 23 percent on 2004, which had itself been up 36 percent on 2003. Headcount was 2,854 across 71 sales and support offices. The same filing restated years of accounts and recorded a net loss of $183 million in a single quarter.

~ the chronicle ~

~ the shopping years ~

Mercury got where it got partly by buying. Freshwater Software came in 2001 and its web monitoring tool became SiteScope. Kintana cost $225 million in June 2003 and turned the company into an IT governance vendor almost overnight, with Performant picked up the same year for $22.5 million to do Java diagnostics. What all of it bought was default status: banks and telcos that needed to know whether a new web front end would survive Monday morning traffic were, by 2005, very likely finding out through a Mercury product.

This was software bought by procurement departments, which is a category I have never once chosen anything from. Load testing is real engineering and I have done versions of it, but the Mercury license was the kind of purchase that arrived as a line item from a floor above you. You met the product as a tool somebody else had already standardized on, with a name you did not pick and a seat count that someone was tracking.

~ forty-nine grant dates ~

A special committee of the board went back through the stock option grants and found forty-nine where the recorded grant date did not match the date the grant appeared to have actually been made, reaching back to 1995. Five more were added to that count later. Picking a day when the share price was lower makes the option worth more the moment it is handed over, and doing it after the fact makes the paperwork a lie. Amnon Landan resigned as chief executive in November 2005, along with the finance chief and the general counsel.

Then the filings stopped arriving on time, because the restatement was enormous. Nasdaq announced on 3 January 2006 that Mercury was off the National Market, and the stock opened on the Pink Sheets the next day, where it stayed until HP bought it. The company said it spent around $70 million on the investigation and the restatement. On 28 September 2006 it announced a proposed settlement with the SEC staff, which closed in May 2007 as a $28 million civil penalty paid by what was by then an HP subsidiary. HP agreed that October to pay $117.5 million to settle the shareholder class action.

~ where the code went ~

The products did not go down with the company. Mercury's tools became HP Software, moved to Hewlett Packard Enterprise when HP split in two, were sold on to Micro Focus in September 2017, and arrived at OpenText in 2023 when it bought Micro Focus whole. LoadRunner is still on sale today, under its fourth owner since the company that wrote it stopped existing.

@}-->--

              )
             (_)
            .-'-.
            |   |
            |   |
            |   |
            |   |
          __|   |__   .-.
       .-'  |   |  `-:   :
      :     `---'     :-'
       `-._       _.-'
           '""""""

« previous  ·  random  ·  next »