CA to buy NetQoS for $US200 million

Deal gives CA access to application-aware network and systems management products

CA has announced plans to acquire NetQoS for $US200 million, adding application-aware network and systems management products to the software maker's broad enterprise IT management portfolio.

CA executives say the pending acquisition offers little overlap by way of products and will help CA products diagnose the root cause of application errors within the network and systems infrastructure. The added technology will also boost CA's efforts to manage advanced infrastructures that feature virtual systems and cloud computing environments, the vendor says.

"NetQoS technology complements CA's Wily products and will help network and systems engineers better design their infrastructure to ensure application issues don't occur from the start," says Roger Pilc, senior vice president and general manager of CA's infrastructure and automation business unit. "The technologies will help network and systems management be more application aware."

The deal, anticipated to close in CA's fiscal third quarter, would augment an already full software lineup grown via previous acquisitions of Wily Technology, Concord Communications and Aprisma. CA executives say NetQoS products, designed for network managers responsible in part for application delivery, will add to the company's Wily products that detect performance problems in the application environment. NetQoS tools are able to detect application performance problems using network-centric measures such as traffic flow.

"The acquisition is good because NetQoS has a focus on application delivery, so when combined with Wily, it offers a good one-two punch. Customers can visualize the links and relationships between the delivery technologies and the business applications and services with Wily, and understand the real-time application and service activity across those links and relationships with NetQoS traffic flows," says Jasmine Noel, co-founder and principal analyst at Ptak, Noel and Associates.

With some areas of overlap in the former Concord eHealth and Aprisma Spectrum tools, CA's Pilc say the company will work to address issues after the deal closes. Noel says customers should not expect NetQoS tools to get lost in the shuffle as CA could have targeted plans for each product suite.

"In terms of portfolio, CA now has two network performance management solutions, eHealth and NetQoS. But I think CA has specific targets for both solutions," she says. "CA's eHealth technology will target network engineers who spend most of their time managing performance of specialized network infrastructure. NetQoS technology will target network engineers who focus on application delivery where the management of traffic flows is the primary task, rather than the management of thousands of network devices."

CA also expects the NetQoS technology to play a bigger role in its virtual and cloud management offerings. With its ability to track flows across virtual and physical elements, NetQoS tools could be coupled with Cassatt assets CA acquired earlier this year, the company says. With no previous partnerships, the two vendors share some 200 customers and CA's Pilc foresees "very little modification in the NetQoS product set and its approach to customers going forward."

That is why NetQoS executives found the deal to be synergistic. NetQoS co-founder and CEO Joel Trammel says CA represented the best fit with his company's technology, and customers shouldn't expect any change in products or support as the deal unfolds. NetQoS has more than 1,000 customers worldwide and reported revenue of $56 million in 2008.

"We sought out CA because we saw a clear fit with us and the company's success in acquiring Wily, Concord and Aprisma. We were excited and see the clear fit between tying these acquisitions together," Trammel says.

Industry watchers expect the deal could benefit both parties going forward if CA sales teams focus on the NetQoS suite.

"For a small vendor, being acquired could be good because a larger sales force means a bigger pipeline. Or it could be bad if it gets lost in the portfolio. In the Swainson era, CA has handled its acquisitions fairly well, and with Wily as a tag-team partner I don't see NetQoS getting lost," Noel says.

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