One former Mercury man’s write-up of what went wrong with the high-flying tech company once it was acquired:
In the case of HP and Mercury, the slow-down was particularly unfortunate because the acquisition came just as enterprise application development was moving from proprietary protocols and GUIs to web applications talking HTTP. Mercury’s powerful and extremely customisable products were arguably overkill for simple web applications, and a new generation of tools was beginning to emerge that was dedicated for that purpose. Given its singular focus on testing, and based on what I know of the company culture pre-acquisition, I am quite certain that an independent Mercury would have addressed the challenge head on and remade itself for that new world. After all, Mercury was fully aware of web applications, offering services that would simulate user access from locations around the world to have a continuous view on sites’ performance as experienced around the world.
Unfortunately, that’s not what happened under HP stewardship. The Mercury products languished in the Software group, which itself represented around 2% of HP revenues. As often happens in such cases, much of the original talent left, creating a flourishing “alumni” network. I was part of that diaspora, so I can’t talk about the quality of their replacements, but there was certainly a discontinuity, as is often the case in these sorts of situations, and the Mercury tools never recovered their previous dominance.
M&A considered hard, very hard.