ID mgmt. consolidation: CA nabs Netegrity

Computer Associates' announcement last week that it plans to fork over $430 million for Netegrity is the latest sign that control of the identity management sector of the network security market is becoming concentrated in the hands of some of the industry's biggest players.

The buyout, expected to close within 90 days, adds secure Web access and provisioning technologies to the authentication, authorization and administration products in CA's eTrust Identity and Access Management Group.

While observers have expected an industry shakeout, this deal came as a surprise because Netegrity posted solid financial results for the first half of the year and appeared to be trying to distance itself from other identity management specialists by making acquisitions. Earlier this year, Netegrity snapped up Business Layers to add provisioning and allocation software to a portfolio that already included authentication products.

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Computer Associates' announcement last week that it plans to fork over $430 million for Netegrity is the latest sign that control of the identity management sector of the network security market is becoming concentrated in the hands of some of the industry's biggest players.

The buyout, expected to close within 90 days, adds secure Web access and provisioning technologies to the authentication, authorization and administration products in CA's eTrust Identity and Access Management Group.

While observers have expected an industry shakeout, this deal came as a surprise because Netegrity posted solid financial results for the first half of the year and appeared to be trying to distance itself from other identity management specialists by making acquisitions. Earlier this year, Netegrity snapped up Business Layers to add provisioning and allocation software to a portfolio that already included authentication products.

CA says the Netegrity acquisition is part of its plan to concentrate more heavily on security products, which in accounting for 17% of new bookings this quarter represent one of the company's hottest businesses. Identity management is one of the hottest segments in security, fueled by compliance concerns and the need to shore up internal systems.

"Identity management is simply too big and important of an issue for large, multinational enterprises to rely on a hodge-podge of products from small vendors, many of which have overlapped in functionality," says Jamie Lewis, president at Burton Group.

Other big vendors targeting identity management include Sun, which last week responded to the CA/Netegrity deal by offering a free upgrade from Netegrity's SiteMinder to Sun's Java System Access Manager. Sun made an identity management company acquisition last year when it bought out WaveSet.

Also last week, IBM staged an event in Washington, D.C., to launch a batch of identity management services with partners. The new services are aimed at helping companies build and centrally manage systems for securing physical premises and virtual information repositories - from employee badges, door locks and security cameras to data, computers and networks. The technology bundle includes IBM's Tivoli Identity Manager software, smart cards from ActivCard, fingerprint-based biometric verification technology from Bioscrypt, and public-key infrastructure software from VeriSign. GE is supplying components for facility security, and ImageWare Systems is supplying identification products for managing and issuing access-control credentials.

The IBM effort would seem to indicate that there continues to be room for vendors large and small in identity management.

"Our fate is controlled by ourselves - consolidation does not threaten our existence," says Gordon Eubanks, CEO of Oblix, an identity management company whose name has been bandied about as a possible acquisition target of Microsoft. He says companies need smaller players to help them secure heterogeneous environments.