In September 1999, at the height of the dot com boom, a small group of colleagues and I started a new company, Loudcloud, based on the idea that the huge Internet infrastructure buildout then underway — by startups and big companies alike — required a new approach to running modern datacenters and computer systems at high scale: automation.
The eight years that have followed have been an unbelievable journey.
Loudcloud took off like a rocketship, raised $350 million in equity and debt financing, went public in March 2001, and was rapidly nearing $100 million in annual recurring managed services revenue when the entire market blew up and virtually all of our competitors and peers went bankrupt.
In September 2002, we did a complete restart as a public company — we sold our managed services business to EDS and turned Loudcloud into Opsware, a software company based on the core intellectual property developed at Loudcloud. Over the next five years, we executed on our original vision — automation of large-scale modern datacenters and computer systems — within this new model, and built a comprehensive family of state-of-the-art automation software products that power the full range of technologies you find in a modern datacenter, from servers and applications to networking and storage.
We have become the clear market leader, and today our software is in use at more than 350 of the largest and most advanced businesses and government agencies, including Goldman Sachs, JP Morgan Chase, Home Depot, GE, Microsoft, Samsung, Comcast, Tivo, and the US Department of Defense. Along the way, Opsware has grown to more than $100 million in annual revenue and 550 employees, and has become one of the fastest-growing software companies in the world.
Today we have announced that Opsware is being acquired by Hewlett-Packard for more than $1.6 billion in cash, or $14.25 per share.
For Opsware, this means that our vision will now get delivered at much higher scale — being part of HP’s software business will ensure that our software will be used by a much larger number of organizations and have an even more dramatic impact on the industry than we would possibly have been able to reach by ourselves over the next several years.
For HP, this means that HP instantly becomes the clear and overwhelming market leader in automation software for modern datacenters and computer systems. HP’s software product family will now cover the vast majority of needs of any modern technology organization. HP has a first-class opportunity to define the architecture and be the major vendor of infrastructure — hardware and software — for the huge Internet buildout of the next 10 years.
And now, I have some people to thank…
- A huge thank you to all of the outstanding people currently at Opsware, and all of the outstanding people who were at Loudcloud before that — especially the amazing number of people who have been with us from the very beginning. You all are one of the most impressive teams I have ever seen assembled in one place, and it has been a huge privilege for me to be able to work with you to build a real company.
- Another huge thank you to my cofounders and partners, Ben Horowitz and Tim Howes. Ben and Tim are the best partners and friends anyone could be lucky enough to have. When the deal closes, Ben will be joining HP as the head of HP’s Business Technology Optimization software organization — which includes all of HP’s products formerly from Mercury, OpenView, Peregrine, Novadigm, and now Opsware. In that role, Ben will be responsible for more than $2 billion in annual revenue.
- Thank you to all the customers and partners who have worked with us and supported us and helped us become the company we are today. Your support has meant the world to us and we will never forget it. And a special shout out to our friends at EDS and Cisco, who have been simply amazing.
- Thank you to our investors — both the original investors such as Benchmark Capital and Ron Conway who believed in our dream from the start, and the new investors we picked up as our stock rose more than 40-fold since October 2002. One of my favorite facts about this deal is that at our acquisition price of $14.25 per share, everyone who bought and held stock in Loudcloud or Opsware in the public market at any time made money.
- Finally, thank you to Mark Hurd, Ann Livermore, Shane Robison, and Tom Hogan at HP for your commitment to carry forward our idea and our dream. I look forward to seeing what you can do with our baby.
The lawyers made me add the following:
This blog entry is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any securities. The solicitation and the offer to buy shares of Opsware common stock will be made only pursuant to an offer to purchase and related materials that HP intends to file with the Securities and Exchange Commission. Opsware stockholders and other investors should read these materials carefully because they contain important information, including the terms and conditions of the offer. Once filed, Opsware stockholders and other investors will be able to obtain copies of the tender offer statement on schedule “TO,” the offer to purchase and related documents without charge from the Securities and Exchange Commission through the commission’s website at www.sec.gov. Opsware stockholders and other investors also will be able to obtain copies of these documents, without charge, from Innisfree M & A Incorporated, the information agent for the offer, at +1 877 750 5838 or by email at firstname.lastname@example.org, from J.P. Morgan Securities, Inc, the dealer manager for the offer, at +1 877 371 5947, or from HP. Stockholders and other investors are urged to read carefully those materials prior to making any decisions with respect to the offer.
This blog entry contains forward-looking statements that involve risk and uncertainty. All statements other than statements of historical fact could be deemed forward-looking statements, including the expected benefits of the transaction for Opsware and HP and any other statements of expectation or belief. These statement are subject to risks, including the possibility that expected benefits may not materialize as expected; that the transaction may not be timely completed, if at all; that, prior to the completion of the transaction, Opsware’s business may not perform as expected due to transaction-related uncertainty or other factors; that the parties are unable to successfully implement integration strategies; and other risks that are described from time to time in HP’s and Opsware’s SEC reports, including the risks described in HP’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2007 and Opsware’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2007.