Micro Focus Gains ALM Muscle with Borland, Compuware Unit Buys
U.K.-based Micro Focus makes a power move deeper into the software testing and application lifecycle management spaces by acquiring Borland Software and the Quality Solutions product line of Compuware for a combined cost of $155 million.Micro Focus made a big splash in the application lifecycle management and automated software quality markets May 6, announcing plans to acquire both Borland Software and a division of Compuware. The two moves will cost Micro Focus about $155 million-$75 million for Borland and $80 million for Compuware's Quality Solutions product line.
Stephen Kelly, CEO of Micro Focus, called the moves a "very logical progression" for the company as they built on the products Micro Focus already offer in the testing space, which the company said is valued at $2 billion annually.
"The acquisition of Compuware's testing and ASQ Business is an opportunity to establish a significant presence in this fragmented market, which fits closely with Micro Focus' existing application management and modernization offering. Micro Focus already operates in the ASQ market through its Data Express product."Regarding Micro Focus' Borland acquisition, Bola Rotibi, a principal analyst with Macehiter Ward-Dutton, told eWEEK:
"Micro Focus is a bit of a left field surprise seeing as many-myself included-might have thought an acquisition of Borland by Oracle might have been more in line with the latter's supposed desires to cement a more credible role in the ALM market. Borland's acquisition has been in the cards for some time, certainly for the last couple of years and even more so with the sale of its tools division CodeGear to Embarcadero last year and its poor share price. That said, the company has got some good tools, particularly with respect to the Borland Management Services platform and the focus on applying greater analytics and obtaining better intelligence and metrics from the development lifecycle process. The embrace of agile development and delivery processes is also a worthy note that has seen operational costs looking fairly lean. So in this respect, Micro Focus has got a reasonably good purchase with very little overlap of their own tool set and a lot to complement their strategy and direction for application modernization."The Compuware purchase, on the one hand, "is a good purchase, since once again the tools are strong in capability," Rotibi said. "However, the overlap between the testing and quality management solutions that Micro Focus is acquiring from Compuware and those that it is getting from Borland [Segue's SilkTest] will certainly take some sorting out going forward, although it is not inconceivable to keep both brands going. What it does suggest, however, is that testing and quality management is a major strategic direction for the company. Clearly, Micro Focus is not leaving anything to chance by buying up two strong tool sets-complete with their development and support structures and customers." Jeffrey Hammond, a principal analyst with Forrester Research, said: "It is an unexpected move on the part of Micro Focus, but it certainly establishes immediate credibility for them as an ALM player. They will need to stabilize their newly inherited customer base and make some investments in the technology stacks to bring them up to par with other recently introduced products from competitors like Microsoft, Serena, HP and IBM, but it certainly helps that they have a well-established set of existing developer products and a healthy revenue stream that will give them time to stabilize the products they've just taken on." And Thomas Murphy, an analyst with Gartner, said the acquisitions "make Micro Focus the No. 2 player by revenue in testing, and it initially is a good thing in that it is a more stable company, they understand the market, etc." However, Murphy said he is not sure if Micro Focus will keep "both testing tools going moving forward. In many ways, I don't see how it fits any known strategy from Micro Focus to become a serious ALM player."