CA, Nimsoft Executives: MSPs Are the Channel of Tomorrow

CA, Nimsoft Executives: MSPs Are the Channel of Tomorrow

CA's Chris O’Malley (pictured) and Nimsoft's Gary Read dialed me about an hour ago to offer additional insights on CA's $350 million buyout of Nimsoft. When did the negotiations start, how did Nimsoft initially react -- and why is CA so intrigued by the managed services market? O'Malley and Read provide the answers. Here they are.

In some areas I paraphrase thoughts from O'Malley (executive VP of CA’s Cloud Products & Solutions Business Line) and Read (CEO  of Nimsoft) because the conversation was moving pretty darn fast. But here are the highlights...

Topic 1: Target Market Segments - Including MSPs

MSPmentor: CA says the deal focuses mostly on managed services providers, cloud computing and emerging enterprises. But Nimsoft has successfully competed against BMC, IBM Tivoli, HP OpenView and even CA in some enterprise accounts. Will CA position Nimsoft against those large rivals in enterprise accounts?

O'Malley: Gary has been successful at replacing OpenView and Tivoli for those customers who have difficulty [with those platforms]. We do see an opportunity in mega-global top 4000 accounts to go after replacement opportunities. Gary will also train the salespeople who sell to mega accounts to sell Nimsoft... But our primary Nimsoft focus is to target new customers in emerging enterprises, MSP opportunities and cloud [monitoring] opportunities.

Read: Chris is spot on. Particularly in the MSP space, traditional competition like the BMCs and IBMs are nowhere to be seen. Nimsoft competes with Kaseya and open source platforms and all sorts of different things. What CA realized was the MSP as the channel of tomorrow. That’s something we’ve talked about for many years. Nimsoft has never really employed traditional VARs. We think MSPs are the channel of tomorrow, and that only increases with MSPs focused on the cloud. CA was the first company to share this vision with us. When I sat down with them it was like I was hearing myself speak.

Topic 2: The Negotiations

MSPmentor: When did CA inquire about buying Nimsoft?

O'Malley: November [2009]. As we performed our due diligence, we were seeing more and more MSPs becoming the IT organizations for companies. We think that trend will grow and grow over time...We believe strongly that MSPs will be the deciding factor on how IT management functions will be consumed.

Topic 3: Internal Reaction at Nimsoft

MSPmentor: Gary, when did Nimsoft's staff learn about the negotiations and how did they react?

Read: Since CA is publicly held, we had to remain silent. We looped in the executive team and some engineering leaders to explore the synergies. The reaction from the executive team and from the engineering team as we went through the process was the same. First it was a raised eyebrow. But as they met the folks from CA, they realized “oh my God, when can we get started?"

For the broader staff, we told everyone this morning under NDA [a non-disclosure agreement]. And it was the same type of reaction. The majority of folks, and all the comments I've heard, indicate that the employees are very excited.

We've talked to employees internally about the cloud changing the game. But what you come to realize is that no one company has all the tools.

Some companies have huge strengths and challenges. Our strengths were in our products, our model and our understanding of the market. But our challenge was scalability. We were growing and hiring as fast as we could. But we needed to move even faster. This deal retains the positives of Nimsoft -- the technology, the people and the products. But now we can do so much more in an expansive way. There’s still a lot of execution for us to get there.  But in my opinion, when you look at the leaders of tomorrow, the first box has just been filled in. It's CA and Nimsoft.

Reality Check

I realize O'Malley and Read sound very bullish. Of course, all couples are happy on their wedding day. On paper, CA and Nimsoft have plenty of synergies in the IT management space. And they're different enough to ensure Nimsoft's MSP and emerging enterprise focus potentially complement's CA's enterprise heritage.

But this is the honeymoon period. I'll be curious to see if CA -- and the Nimsoft veterans working at CA -- can maintain their upbeat perspectives and execute on this acquisition.

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TAGS: Financing RMM
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