Cherry picking continues in systems management

The status of systems management as one of IT’s real growth software markets was re-affirmed in March as a slew of niche vendors were snapped up by the giants of the sector.

The most significant – and surprising – of these was IBM’s acquisition of long-term rival (and sometimes partner) Candle Corp.

Privately-held Candle expanded rapidly in the 1980s and 1990s by focusing on performance monitoring, a weak spot in IBM’s mainframe software line-up. Although revenue from its Omegamon suite has fallen back in recent years, Candle has continued to hold a grip on this segment while expanding into a second niche – performance tools for IBM’s WebSphere development and deployment environment, known as PathWAI.

Although the financial terms of the deal have not been revealed, the acquisition price will have easily exceed Candle’s 2003 revenues of $233 million, even though these fell 16% during the year. All of Candle’s 800 staff will transfer to IBM. However, the company’s fiercely independent CEO and founder, Aubrey Chernick, who along with his family owns more than 90% of Candle’s shares, is not expected to make the move.

On a less dramatic scale, Hewlett-Packard (HP) and Computer Associates (CA) made point additions to their portfolios in March. The latest in HP’s planned “billion-dollar” adaptive enterprise spending spree is TruLogica, an innovative identity management software company that will be rolled into HP’s OpenView Select Access business. Rather than organising identity management elements by resource and role, TruLogica’s Concero ‘contextual ID management’ uses the organisational model of a business to corral resources into business services.

CA’s purchase of Miramar was also in the realms of user provisioning, but of a slightly different kind. Miramar’s ‘Desktop DNA’ technology is used for automatically transferring a user’s old software and settings onto new computers – a practical but important aid that comes into its own during a company’s PC refresh cycle or when managing an upgrade to a new version of Windows.

One of CA’s rivals in systems management, privately-held Allen Systems Group (ASG), was also on the acquisition trail. The company continued the three year long run of takeovers, that has fuelled a growth rate of nearly 400%, with two further purchases: Dirig, a vendor of Java application performance management software (akin to Candle’s PathWAI); and Soamai, with its Becubic software for tracking legacy applications. The latter product is a more traditional fit for ASG. It will sit alongside home-grown tools and other legacy management software acquired with the buyouts of Landmark Systems, MSP and Viasoft.

Key industry acquisitions in March
Acquirer   Activity   HQ   Target   Activity   HQ   Price  
ASG Systems mgmt s/w &svcs US Soamai IT asset mgmt/legacy apps s/w Fr n/a
ASG Systems mgmt s/w &svcs US Dirig Software Java performance mgmt s/w US n/a
Bain/SilverLake/Warburg Investment consortium US EDSÕs UGS PLM Solns unit Prod data mgmt s/w &svcs US $2.05bn
Business &Decision BI systems integrator Fr Lenton BI consultancy UK n/a
Cisco Systems Networking products US Twingo Systems Desktop security s/w US $5.0m
Cisco Systems Networking products US Riverhead Networks DDoS security technology US $39.0m
Click Commerce Channel mgmt s/w US Webridge Extranet portal s/w US n/a
Cognos Business intelligence s/w US Softa Performance mgmt consulting UK n/a
Computer Associates Int Systems mgmt s/w US Miramar Systems Desktop migration s/w US n/a
DoubleClick Internet advertising s/w US SmartPath Marketing resource mgmt s/w US n/a
Eicon Networks Secure remote comms tech US MernetÕs Shiva business Secure remote access s/w US n/a
Gateway PCs &consumer electronics US eMachines PCs US $30.0m
GXS B2B transaction s/w &svcs US HAHT Commerce Demand chain mgmt s/w US n/a
Gores Technology Group Investment group US DiData’s Proxicom unit Web design &e-consultancy US n/a
Hewlett-Packard Systems, s/w &services US TruLogica User-provisioning s/w US n/a
IBM Systems, s/w &services US Candle Perf mgmt s/w US n/a
IBM Systems, s/w &services US Trigo Technologies Prod info mgmt middleware US n/a
Identix Biometrics systems US Delean Vision Worldwide Skin biometric s/w US n/a
Tacit Networks Remote office s/w US AttachStor Email attachment access s/w US n/a
Tumbleweed Comms Internet messaging s/w US Incubator Tumbleweed prod reseller UK n/a
Unilog IT services Fr Mezenet SAP BI consultancy UK n/a
Verisign Internet security technologies US EFIÕs Unimobile unit Mobile messaging s/w US $5.25m
Yahoo! Internet portal US Kelkoo Price comparison engine Fr EU475.0m

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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