* What the CA-Netegrity deal could mean to the identity mgmt. market
There were a couple of big news stories last week where identity management was not only involved but was core to the story.
First, there was IBM’s announcements of both new and realigned technologies and partnerships intended to help customers tie identity management to its core security needs. Since the boys in Armonk didn’t see the need to invite me to the press conference (it was run under the auspices of the “director of security and safety”) it will take me a bit of time to catch up on everything that was announced, so we’ll have to get back to it in a later issue.
The biggest news, though, was the announcement that Computer Associates was acquiring Netegrity for $430 million in cash. I was astounded, mostly because there was little, if anything, that Netegrity could offer that CA doesn’t already have in-house.
It may have been the Netegrity customer base that was attractive to CA, or it may reflect ongoing problems at the software giant following its legal problems. Former CA Chairman and CEO Sanjay Kumar as well as former head of worldwide sales Stephen Richards, were recently indicted for their part in a scheme (called the “35-day month”) to keep the sales books open long enough to meet financial goals promised to investors. Both face up to 100 years in prison if they’re convicted.
Sun was quick out of the box to try to take advantage of the CA-Netegrity announcement by rushing to unveil its Java System Access Manager migration tool. This free tool will allow users of Netegrity’s SiteMinder to quickly and easily migrate to the equivalent Sun product.
The “hurry up and get it out the door” announcement, right on the heels of the CA-Netegrity announcement, is further pointed up by Sun’s delay of a similar tool for users of IBM Tivoli Access Manager and Oblix COREid. Perhaps alluding to the long time it took IBM to integrate its acquisition of Access360 into its Tivoli division, when asked about the Netegrity deal, Sun executives said: “With its acquisition of Netegrity, Computer Associates will be focusing internally to align its organization and product set. Identity management is a fast-moving market and customers will need to work with a vendor who can provide them with a complete identity management product set today and who is innovating toward tomorrow.”
Sun may have a point.
Thor Technologies CEO Alberto Yepez also sees this as a great opportunity (much as he saw when Netegrity acquired Business Layers. And he was right about that!).
According to Yepez, “As the consolidation in the identity management market continues, it offers a huge opportunity for best-of-breed vendors that can execute well to gain significant market share by building a track record of delivering value through successful deployments, as the large players focus on integrating their offerings into their stack.” (Echoing some of what Sun said.)
Pulling no punches, Yepez went on: “CA has a legacy provisioning product (eTrust Admin) that didn’t work very well – itself the result of previous CA acquisitions. Now, it has acquired a vendor that offers a provisioning product that doesn’t work very well. So CA spent a lot of money on this transaction and still hasn’t solved its primary problem – to establish a competitive offering in the provisioning market.”
And echoing some of Yepez’ sentiment, Chris Zannetos, President and CEO of Courion Corporation, piped up to say: “What does this mean to the customer who needs an identity management solution without all the additional infrastructure? It means that they will be turning to the few companies out here who are customer-focused and can meet their needs to be fast, flexible and leverage existing infrastructure.”
So the sentiment is that CA will have trouble integrating the acquisition, that it duplicates existing technologies at CA and that far from hurting the competition it will actually boost their bottom line.
I’ve got another theory, only partially tongue-in-cheek. I can envision CA CEO Ken Cron addressing his executive staff. In light of the recent indictment of his predecessor, he mumbles “what we need is integrity.” The Mergers & Acquisitions chief mishears, rushes to his phone and calls Netegrity CEO Barry Bycoff, telling him “whatever you want, we’ll pay!” And they did.
