back to article UK tech whale Micro Focus: Share price halves as CEO quits, sales slide

The brief tenure of Micro Focus CEO Chris Hsu came to an abrupt end today when he quit following a sales slide and confirmation of execution missteps since the purchase of HPE’s Software division. Hsu only landed the top job at Micro Focus – a kind of shelter home for legacy software brands – in September when it merged with …

  1. Pen-y-gors Silver badge

    Legacy stuff?

    I must admit my only memory of any commercial interaction with Microfocus was when they bought out a COBOL compiler for Windows. That must have been bake in the late 18th century...

    1. Deltics
      Pint

      Re: Legacy stuff?

      Visual COBOL.NET is both a thing and actually pretty damned cool (if you're in the business of trying to migrate legacy code off of a mainframe and onto the .net platform).

      COBOL was arguably the first "managed runtime" - one of the reasons that 50 year old code still compiles and runs on modern hardware (the code is old, the kit it runs on is not) is that the source language was abstracted so far from system characteristics. The same applies to the COBOL abstractions for .NET. In a PoC I was involved in a few years ago we found that mainframe COBOL code could simply be re-compiled for .NET - the only tricky part was any EXEC interface code, in our case switching from Oracle Pro*COBOL SQL integrations to ODBC/ADO, but that was a tiny, tiny fraction of the code and quickly and easily dealt with (most of it could be automated).

      Like I said, pretty cool. But I can't say I'm unhappy that I didn't then get involved with the larger project to actually migrate the entire codebase. :)

      1. Anonymous Coward
        Anonymous Coward

        Re: Legacy stuff?

        I remember teaching COBOL programmers how to program in this new-fangled language called C (not C++) thirty years ago.

    2. Michael Wojcik Silver badge

      Re: Legacy stuff?

      I must admit my only memory of any commercial interaction with Microfocus was when they bought out a COBOL compiler for Windows. That must have been bake in the late 18th century...

      Argh. "Micro Focus". Two goddamned words.

      OK, that's my rant over.

      MF is one of the oldest pure-software firms still around, actually. Founded in 1976. COBOL was the original product line and still a big piece of total revenues, but there has been much diversification. Borland, Novell, and Attachmate are part of the MF fold too.

  2. Anonymous Coward
    Anonymous Coward

    It all went to sh*t

    We were implementing an HPE Hardware & software solution when the sell off of HPE software to MF took place. Whilst the software product implenmetation was not going well, you did at least only have one ass to kick. One they split, implementation support went right into the ground and the product completely failed to deliver. MF blamed the hardware, HPE blamed the software and we were stuck in the middle with our VAR. It would be no surprise if MF have kicked Hsu as under his leadership MF really could not support what they bought from HPE and the products that we were implementing were inherited from HPE software and just didn't perform as stated.

  3. Anonymous Coward
    Anonymous Coward

    He didn't know what he was getting into?

    He should have known exactly what he was getting into. He was COO of HPE before he cherry-picked his next role as SVP & GM of HPE's Software Business Unit - the one which Micro Focus bought.

    I'm not sure how the article didn't contain a mention of the perpetual turd-in-a-punch-bowl Autonomy.

    Several Meg Whitman success stories there all rolled into one.

    1. Jove Bronze badge

      Re: He didn't know what he was getting into?

      Well, he would certainly have made sure he got paid whatever the out come.

  4. Anonymous Coward
    Anonymous Coward

    CEO Quits?

    Quits?

  5. x 7

    So what software do they actually sell?

    Only HP branded software I can ever remember seeing has been printer drivers, and a bespoked version of DOS5

    1. Anonymous Coward
      Anonymous Coward

      Only HP branded software I can ever remember ...

      HP bought Radia (a software distribution solution) from Novadigm and renamed it for each of the three subsequent releases. - According to Wikipedia

      April 2007 - Version 5.0 HP OpenView Configuration Management released

      October 2007 - Version 5.1 HP Configuration Management released

      July 2008 - Version 7.20 HP Client Automation released

      By the time we stopped using Radia we couldn't keep up with the name changes (so we just called it Radia).

    2. Anonymous Coward
      Anonymous Coward

      ArcSight SIEM, Voltage format-preserving encryption, Atalla block encryption, Fortify application security manager (static, dynamic, and firewall protection). Not to mention the Micro Focus stable of advanced mainframe access solutions (yes, mainframes are still a thing), the NetIQ access management suite, Serena DevOps, and much, much more.

      1. Gordon 10 Silver badge

        Plus Autonomy,Zantaz, Vertica, IDOL etc...

        1. Michael Wojcik Silver badge

          SUSE Linux, too, though SUSE operate as a separate business unit.

  6. Anonymous Coward
    Anonymous Coward

    Doesn't sound that bad

    DXC does far worse yet can't seem to kick its CEO under a bus...

    1. Gordon 10 Silver badge
      Unhappy

      Re: Doesn't sound that bad

      An optimist might suggest that's the difference between UK and US corporate governance.

      A cynic might suggest he's just had a sh*tload of HP options vest.

  7. PNGuinn
    Holmes

    "submitted his resignation ... pursue another opportunity"

    Hmmm ...

    One wonders if this new gig comes with a brush or whether he will have to supply his own ...

    Enquiring minds etc.

  8. J J Carter Silver badge
    Trollface

    Oops

    Sounds like Micro Focus should raise a trouble ticket on that HP Service Anywhere they bought, if they can get it to work. We can't!

  9. John Styles

    I remember someone thinking that when I said we would (re)develop something in MFC I meant 'MicroFocus COBOL'

  10. fluffybunnyuk

    I went to get a copy of SUSE Enterprise Server for a testbed for our operations a few years ago. With MicroF***up above being the provider of support. Turns out it needed registering with a serial number.

    It was a first for me needing to register a linux distro to get security patches in 22 years... Anyway it turned out their nice registration system was screwed, and wouldnt recognize the serials. 1 warning sign is cautionary, That being the 2nd said get me to the redhat site...

    One redhat install later, and a month of uptime with no faults working seamlessly , we rolled out redhat. No Microf***up in sight.

    I ended up speaking to the director of operations i think it was who told me he'd look into the problem, I still assume he's still looking. It was clear from our conversation the company was a basket case then.

    1. bobajob12

      Interesting. There was a time (around RH5 or 6 IIRC) where Serious People could go SUSE or RedHat. Since then, SUSE seems to have disappeared and RedHat exploded into a goliath. Now it's Ubuntu or RedHat.

      Whatever happened to SUSE?

      I'm sure I'll annoy SUSE fans out there with the question, and I'm not bashing it, but really - google for <some task on Linux> and 99.9% the instructions will be for RH/CentOS or Debian/Ubuntu.

      Was it marketing? Lawsuits? Incompetence? Genuinely curious.

      1. HmmmYes Silver badge

        Suses europes redhat.

        A lot of large european companies use suse esp. Sap installs.

      2. pwl

        ob. disclosure: i work for SUSE

        the reason was marketing, timing, and locality

        - SUSE got somewhat “buried” under the novell brand just at the time that linux became a Big Thing. By the time Attachmate took Novell private & split out SUSE as a separate business unit, a lot of the prior momentum had been lost

        - being a european-based company, suse was less well known in the US & also less used for US military & government , leaving the space for redhat to build a comfortable base. conversely it probably contributed to the close relationship with SAP, where SUSE enjoys a big lead.

        - being germany-based also affected the culture of not being proactive & demonstartive with marketing, but instead just focused on the engineering. as a result, SUSE Linux is *inside* a lot of other vendors technologies: Teradata, HPE hardware, VMware, Cray, and others. Pretty much every modern data centre has something running SUSE ... it’s just not on the label.

        SUSE is now semi-autonomous division of Micro Focus - there are back-end shared services like finance & legal, but pretty much everything else is separate & growing

        1. Gordon 10 Silver badge

          So its basically the OS version of Sybase? :)

  11. John Smith 19 Gold badge
    Unhappy

    I suspect MF has lasted this long with a very particular corporate cultcure

    Something some guy parachuted into the top spot isn't going to share.

    So I guess the question is with the share price halved how much investor value did his tenure destroy?

    So If you believe getting rid of him puts them in turnaround (I think the replacement is a long term MF employee) there's never been a better time to buy...

    OTOH If you think he's doing a Carillion there was a better time to sell, but it's already gone.

    Time to roll the dice?

    1. Nick Kew Silver badge

      Re: I suspect MF has lasted this long with a very particular corporate cultcure

      It's been a superb investment over the years. Even after this fall, the share price is more than twice what I paid, and they've generated a lot of cash in the meantime.

      Legacy software is a strange business. A long way from the average Reg commentard - but then we're atypical, as witness the small market share held by Windows among us. Clearly their market is elsewhere, but is - or at least was - highly profitable.

      My thought was, and still is, if anyone can make a go of the HP mess it's them. Time will tell if this works for them in the longer term, or whether it's a unfolding as a classic τραγῳδία from an act of ὕβρις.

      1. bobajob12
        Pint

        Re: I suspect MF has lasted this long with a very particular corporate cultcure

        Upvoting just for the references to Greek drama. Nothing like El Reg to take the reader from Homer Simpson to Homer in a single day. That's why I read it.

        1. Nick Kew Silver badge
          Headmaster

          Re: I suspect MF has lasted this long with a very particular corporate cultcure

          To be pedantic, Homer didn't write tragedy. The form comes to us principally from the great trio[1] of Aeschylus, Sophocles and Euripides. And of course later artists, like Shakespeare and Wagner, who revived the form in their respective times.

          [1] "trio" is of course a bit of an oversimplification. Though Sophocles's 95-year life did overlap with both the others.

          1. CrazyOldCatMan Silver badge

            Re: I suspect MF has lasted this long with a very particular corporate cultcure

            Homer didn't write tragedy. The form comes to us principally from the great trio[1] of Aeschylus, Sophocles and Euripides

            Discussing with my wife about "It ain't half hot mum"[1] her comment was that "it's a very 1970's form of comedy".

            My response: "it's a lot older than that - the ancient Greeks had very similar farces with identical themes (gender confusion, personal identity confusion, deliberate misunderstanding etc etc) and there's nothing really new under the sun..

            [1] Went to see the Joe Pasquale version at our local theatre. She loved every minute (having seen it on TV in the 1970's). Never having seen it before[2] it took me quite a while to get in to it. But it ended up being pretty enjoyable anyway.

            [2] We didn't have a TV until the early 80's. And even then it was strictly only for watching documentaries for improving the mind or, in the case of my mum, watching snooker.

  12. CheesyTheClown

    Should have taken the Borland name

    To be honest, a while back, I was looking to buy some Borland team management tools. I was ready to invest and would have had no issues doing so, but when I saw the name Microfocus, I realized that buying the tools would embroil me in a great deal of buracracy and probably sales meetings which would simply drive the costs up. Not only that, but because Microfocus has too many products, I suspected that all documentation would be buried and product support would be come and go like it is at HPE.

    It is sad, I don’t consider SUSE, Borland or Novell tools because of fear of the headaches of doing business with Microfocus.

    That said, while I don’t use them other than out of interest, core products from Microfocus like their .NET COBOL tools are very well written and supported. Too bad that their acquisitions and mergers business is just toxic.

    They should however broken their business into two different divisions. One for traditional mainframe style purchases like COBOL and Openview. The other for more agile products like those from SUSE, Borland and Novell.

  13. Anonymous Coward
    Anonymous Coward

    A pause for quiet reflection .....

    Perhaps Chris Hsu - as a former SVP of Organizational Performance and Separation Leader for HPE - can spend some time pondering the irony of his current situation. So now he might get to know what "separation" feels like. Not nice, is it!?! Now you get a little taste of what thousands of HP Enterprise employees got to savor ....

    1. Anonymous Coward
      Anonymous Coward

      Re: A pause for quiet reflection .....

      Now you get a little taste of what thousands of HP Enterprise employees got to saver ....

      Yep - tastes like: The Golden Parachute, The Even Cushier Next Job, Running Another Business Into The Ground ....

      1. Anonymous Coward
        Anonymous Coward

        Re: A pause for quiet reflection .....

        Yep - tastes like: The Golden Parachute, The Even Cushier Next Job, Being paid by the competition to Run Another Business Into The Ground ...

        TFTFY

  14. Anonymous Coward
    Anonymous Coward

    INITIALISE CEO-COUNT TO 1

    PAUSE FOR 6 MONTHS

    SUBTRACT 1 FROM CEO-COUNT

    GO TO BLOCK PROBLEM-SOLVED

    or something...

  15. Anonymous Coward
    Anonymous Coward

    To be expected

    Having sold the HP software portfolio for many years and seen the portfolio grow without any clear strategy, I'm still unsure as to why MF bought it. Time after time HP bought innovative products that were market-leading or challengers and absorbed them into the mass with very little focus or marketing and they just seemed to die. To name just a few I can think of - Novadigm, Shunra, Peregrine, half of the Mercury portfolio, Fortify, OpsWare, Vertica, Tower, TriLead... etc etc. I for one and not surprised it's going downhill. Their SaaS business was a nightmare and they're still trying to push perpetual licenses for old technology in the face of innovative open source offerings. Customers were moving away and reducing / cancelling support at a huge rate so that's not even the cash cow they might have hoped.

    1. John Smith 19 Gold badge
      Joke

      "Time after time HP bought innovative products that were market-leading or challengers"

      An HP spokesperson explains their strategy.

      <gollum>

      We wants it

      We needs it

      We must have Novadigm, Shunra, Peregrine, half of the Mercury portfolio, Fortify, OpsWare, Vertica, Tower, TriLead.

      </gollum>

      Joking aside it sounds a lot like the Computer Associates strategy of

      1) Buy up as many competitors in a market niche (usually mainframe) as possible

      2) Data mine their customer base to see who uses other CA products

      3)Figure out which one is the most profitable

      4)Dump most of the development staff (if you haven't already done so)

      5)Call round all the customers and tell them about their new (higher) priced contracts and/or get them to migrate to our preferred option (where we might have kept a couple of devs on).

  16. grizzlybaz

    Cue upswing in Micro Focus audits...

    ...to generate some more revenue. MF are already an aggressive auditor, as are Attachmate, owned by the former since 2014, so I can really see them kicking it up a gear.

    1. John Smith 19 Gold badge
      Unhappy

      Re: Cue upswing in Micro Focus audits...

      Are you not confusing them with Computer Associates? *

      *Whose account managers used to be called "Contract Negotiators" for very good reasons.

  17. Jove Bronze badge

    Sounds like a typical stitch-up by the big-league player; HPE must have seen this coming and acted to dump the divisions before the fall-off got too big. A bit of a rushed job by the sounds of the it, with a bit of brutal back-office surgery during the cleaving for good measure.

    On the other side of this, a bit of a poor reflection on the MF c-level execs for poor due diligence - or would that be a case of them seeing the spin-merger as a way of cashing-out?

  18. Anonymous Coward
    Anonymous Coward

    Chris Hsu is a talented guy but his hiring was a risk because he had never done anything like this. These articles describe him as an HP insider but he was not there very long. Maybe a year and a half? The guy was a cost cut guy from KKR that HP brought in to cut heads and help break up the company. He had never been a tech guy or a CEO, especially of something this nasty. If he did leave of his own accord I give him credit for realizing he had to hand over the keys, but the people he brought into MF (it's called that for a reason...) are probably screwed.

    Two questions: (1) what's the total equity return on Meg's asinine HP split-up look like now? And, (2) at 6.5 months as CEO,did he at least outlast her other hand picked boy wonder who was CEO of survey monkey?

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