Cloud or customers? Why CA wanted Nimsoft

Cloud computing, mid-market customers and service providers drove the IT management software maker to invest $350 million in acquiring Nimsoft.

CA announced it would pay about $350 million to acquire IT service management vendor Nimsoft in a move that industry watchers say could benefit CA on multiple levels.

CA can’t seem to stop spending money on technologies that could enable the vendor to manage cloud computing environments for customers, but industry watchers say all the shopping could also help CA grow its customer portfolio and create a greater presence in mid-market and service provider markets.

CA makes ambitious moves to the cloud

To recap, CA recently announced it would acquire IT service management vendor Nimsoft for about $350 million. The acquisition plans followed CA’s news that it would acquire cloud computing solutions provider 3Tera. CA also pointed to cloud computing plans when it picked up Oblicore and data center automation vendor Cassatt. While much of the work around these acquisitions has yet to be done, the potential is there to create a product set that could enable customers to first deploy public and private clouds – and then manage and automate tasks in the environments, according to industry experts.

“CA is becoming very aggressive – in a positive sense – in singling out cloud computing in its various forms (private, public, community and hybrid) as a disruptive technology, and 3Tera makes a lot of sense as an acquisition in that sense,” said Dennis Drogseth, vice president at Enterprise Management Associates (EMA), in a recent interview with Network World. “Since 3Tera follows the acquisitions of Cassatt and Oblicore – there is a clear message here – strengthened by the creation of its Cloud Products and Solutions business unit. In other words, CA has created an entire organizations directed at focusing on cloud.”

Now with Nimsoft in its sights, CA is not only adding to its technology arsenal, but also positioning itself to appeal to a slew of new customers. Historically strong in enterprise IT accounts, CA is looking to win over more service providers, analysts say. The 3Tera buy helped with that goal to some degree, according to Rachel Chalmers, research direct at The 451 Group.

"3Tera’s application fabric is mature and robust, and better still, the team knows how to sell into managed service providers, something CA needs to learn to do as the future grows cloudier," she said.

Analysts at TRAC Research also recognize CA’s plans to use acquired technologies and teams to enhance the company’s go-to-market strategy, wooing mid-market customers and service providers alike.

“The [Nimsoft] acquisition immediately strengthens CA’s position in the mid-market, while allowing them to grow their managed service provider business,” a recent research report reads. “Over the last two years, CA did a good job of gradually changing its reputation from a company that is making acquisitions just to improve its revenue stream (or get emerging competitors out of the way) to a vendor that has a very clear vision, and it is buying only the missing pieces to a large puzzle they had envisioned.”

But buying technology left and right isn’t without its challenges. Throughout the years (some of which were riddled with accounting scandals) CA earned itself a somewhat negative reputation for acquiring companies without a solid plan for the future of the technology. Now the company, with the help of a management team makeover and streamlined product portfolio, seems to be focused on a clear vision. Still the recent wave of acquisitions will provide a test for the vendor, according to TRAC Research.

"This presents a major test for CA to prove once and for all that it is no longer a company 'where software goes to die,'" the report reads.

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