CA acquired Nimsoft, a performance management software provider, for $350 million. Nimsoft brings a revenue-generating product and 800 customers, including 300 managed service providers (MSPs). This supports CA's strategy of transforming into a cloud company through acquisitions. Nimsoft will operate independently and provide CA access to new customer segments like MSPs and small/medium businesses.
1. By: Mary Turner; Patrik Bihammar; Lucinda Borovick
CA's $350 million acquisition of performance management software provider, Nimsoft, strongly supports
CA's recent claims that its cloud strategy is transforming the company at a record pace. Together with the
recent acquisitions of 3Tera, NetQoS, Oblicore and Cassatt, the Nimsoft purchase will anchor a cloud
product and solution portfolio and pave the way for CA to access a range of customers and markets that
have traditionally been beyond its reach.
Unlike CA's earlier cloud acquisitions, which have primarily contributed core technology and IP, Nimsoft
brings a revenue-generating product and a well-established customer base. Nimsoft was profitable and
cash flow positive with revenue of $32 million on bookings of $54 million in 2009 and was growing at
double-digit rates. Nimsoft has over 800 customers, including close to 300 managed service providers.
Its business is split evenly between North America and EMEA and it has about 120 employees.
In comparison to CA, which focuses on selling traditional system management software products and
service to large, complex enterprise customers, Nimsoft targets managed service providers, midsize
businesses and small enterprise customers. These segments represent important growth opportunities
for CA. Following the acquisition, Nimsoft will operate as an independent business unit led by Nimsoft
CEO Gary Read, similar to the way the Wily acquisition was handled some years ago. CA is looking to
fund rapid growth into emerging markets and benefit from Nimsoft's expertise in working with channels
and customer segments that are new to CA. CA's scale and global reach will provide Nimsoft with
increased opportunities to grow in emerging geographies as well.
Nimsoft Provides CA with an Onramp to Cloud
Nimsoft was originally founded in 1998 as Nimbus Software and renamed Nimsoft in 2004. The company
has found success arming managed service providers (MSPs), hosters, and cloud service providers, with
integrated event, performance and availability management tools that monitor and analyze end-user
response, service level metrics and business service environments. Nimsoft supports bi-directional data
integration into related system management applications such as configuration management databases
(CMDBs) and service desks which should enable rapid integration with a number of CA's existing service
catalog and infrastructure management products, including CA Service Desk and the CA Service
Assurance application and infrastructure management portfolio.
Nimsoft has put significant investment into developing its Unified Monitoring solution in a way that allows
it to be offered at relatively low cost, to be quickly deployed and to be capable of monitoring and reporting
on the performance of both in-house applications and SaaS and cloud services via a single interface.
Nimsoft has developed monitoring and reporting solutions for public cloud and on-demand offerings like
Google Apps™ for Business, The Rackspace Cloud™, Amazon Web Services™ and EC2,
Salesforce.com, as well as internal applications, databases, and physical and virtual server environments.
Nimsoft's tools were designed from Day 1 to support multitenant operations, making them well suited to
managed service providers that want to build their own shared remote monitoring clouds or revenue-
generating service offerings. The firm relies primarily on a subscription-based pricing model, which allows
managed service provider customers to match investment in the product with the growth of the business
CA Doubles Down on Cloud
March 13, 2010 - IDC Link
- 1-
2. that uses the tools. From a revenue perspective, managed service providers represent a little over half of
Nimsoft's revenue.
Much of the remaining revenue comes from small enterprise and midsize end user organizations with
fewer than 2500 employees. Nimsoft has been building strong channel relationships to reach these
customers, including inking a deal with Ingram Micro in September 2009 to expose both its licensed
products and multi-tenant platform options to hundreds of Ingram Mirco's VARs, many of which aspire to
transform themselves into MSPs.
The CA Cloud Story Emerges
Stepping back from the Nimsoft deal itself, and looking more broadly at the package of cloud management
technologies CA has assembled over the last 9 months we see:
• 3Tera – early stage company with technology to automate application deployment into
public cloud environments
• Cassatt – IP around complex infrastructure automation
• NetQoS – network performance management
• Oblicore – service level monitoring and reporting optimized for very large scale service
provider environments
Collectively, the emerging CA cloud portfolio points to an emphasis on policy and service level-driven
application performance management and workload automation.. If successful, over time CA will stand
ready to monitor and optimize workload performance and resource use across public, private and hybrid
resources. IDC expects CA will also use these technologies to bolster its existing CA On Demand portfolio
with SaaS performance monitoring and reporting solutions as well.
As a pure play software product and SaaS provider, CA will be able to offer end customers a portfolio of
tools capable of monitoring and managing across heterogeneous physical and virtual infrastructure and
public cloud infrastructure, platform and SaaS options. CA recognizes that network performance
management is also critical to enabling enterprise customers holistically manage a hybrid environment of
private datacenters and cloud services. Nimsoft brings an agent approach that could potentially expand
CA's ability to help aggregate, correlate and analyze information from the expected explosion of internet
connected devices (3.5 billion in 2013) – another important emerging market.
In IDC's view, over the next 10 years, many organizations will move towards hybrid infrastructure strategies
that rely on sophisticated policy, performance and service level monitoring to drive automated decisions
about where to deploy workloads across a spectrum of internal and public resources. For an independent
software provider to succeed in this environment, it must be able to address service management as well
as infrastructure management and it must be strongly positioned with service providers as well as end
customers.
CA's is clearly making a major bet that the market will evolve in this manner. Unlike virtualization
management, where CA lagged the market in bringing products to market, the firm is clearly investing well
ahead of the curve in the hopes it can both shape and dominate the cloud management market as it
develops. CA will need to learn a number of lessons from Nimsoft if this transformation is to happen
successfully. Channel partnerships, managed service provider support, pricing strategies, and
development priorities will need to be adjusted to address the needs of this developing market.
With this acquisition CA is showing it wants to lead, rather than dabble, in the cloud management market
as that market matures, while also moving to meet the needs of new markets, geographies and customers
in the near term.
Subscriptions Covered:
European Enterprise System Management Software, Enterprise Communications Infrastructure,
Enterprise System Management Software
- 2-
3. Please contact the IDC Hotline at 800.343.4952, ext.7988 (or +1.508.988.7988) or sales@idc.com for information on applying the price
of this document toward the purchase of an IDC or Industry Insights service or for information on additional copies or Web rights. Visit
us on the Web at www.idc.com. To view a list of IDC offices worldwide, visit www.idc.com/offices. Copyright 2009 IDC. Reproduction is
forbidden unless authorized. All rights reserved.
- 3-