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Computer Associates on Thursday made one of its strongest bids yet to boost its standing in the network management market when it announced its agreement to acquire Concord Communications in a $350-million cash deal.
The Marlboro, Mass.-based Concord Communications Inc., best known for its eHealth suite of network-performance monitoring and reporting software, also brings to the table highly regarded network-availability and fault management through its acquisition in February of Aprisma Management Technologies Inc.
“We are weak in this [area]. They have over 100 patents in the area of network management—the broadest portfolio of patents in the market. And we want the expertise of the people who build, deliver, service and support these products,” said Yogesh Gupta, chief technology officer at Computer Associates International Inc. in Islandia, N.Y.
Concord brings to the table over 200 development engineers, 40 presales engineers and 60 post-sales services engineers. “The people really make the difference. They are extremely valuable and extend CAs knowledge in network management,” Gupta said.
The acquisition agreement, which calls for CA to pay $17 a share for Concord Communications stock and includes $20 million in Concord debt, follows close on the heels of CAs announced reorganization and on its acquisition of Netegrity late last year in the security-management space.
Gupta said both acquisitions follow through on CAs pledge to make small and medium-sized acquisitions in its “core competency area” where they make sense. “Netegrity was an obvious one on the security side. It was an area where we werent strong. They were the market leader,” said Gupta of the identity and access-management supplier.
The Concord acquisition, expected to close in about 90 days, is viewed as “complementary” for both CA and Concord, Gupta said.
“I look at this from two perspectives—the complementary nature of this and the ability for us to bolster our Unicenter business. Now the competition cant attack Unicenter on the network management side any more. They [Concord] get a much larger sales organization. They have 3,500 enterprise customers. We have over 10,000 customers on Unicenter. Their customers are on the NOC [network-operations center] side, ours are on the data-center side. We can cross-sell each others products together,” Gupta said.
Concord is also well entrenched among telecommunications companies and ISPs. “They have 23 of the biggest 25 telcos. We can help them completely do end-to-end service management,” Gupta said.
Concord in fact had already begun marketing service-management offerings at telcos and ISPs. Its service-management offerings address high-growth opportunities for managing voice-over-IP and wireless mobile networks.
The Concord business will be integrated into CAs new Enterprise Systems Management business unit, headed by Alan Nugent, senior vice president and general manager. Most of the 640 Concord employees are expected to remain with the company once the acquisition is completed.
CA will continue to make acquisitions in its core security and systems-management businesses, albeit at a pace that allows for careful integration and execution. CAs emphasis in this transition, differing from its past acquisition practices, is on maintaining higher employee retention rates, Gupta said.
“If you try to do [too many acquistions at once] you cant execute on them well,” he said.