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RMM/PSA


CA Acquires Nimsoft: Behind the Latest MSP Software Buyout

  • Written by Joe Panettieri 1
  • March 10, 2010

Another day, another MSP deal. The latest: CA Inc. has purchased privately held Nimsoft for $350 million in cold hard cash. The move has far-reaching implications for managed services providers as well as the MSP software industry. Here’s a first look at the deal, and how we expect it to impact the MSP landscape.

According to CA’s official statement the deal will expand “CA’s presence in Emerging Enterprise and MSP Markets.” I agree completely.

Over the past 18 months or so, Nimsoft has successfully pushed beyond the traditional enterprise market to build relationships with multiple top MSPs — including many ranked near the top of our annual MSPmentor 100 survey. At the same time, Nimsoft has been competing successfully against the Big 4 of IT management — CA, BMC, HP OpenView and IBM Tivoli.

Translation: CA kills two birds with one stone with the Nimsoft deal. First, CA eliminates a competitor. Second, CA moves into the fast-growing managed services market.

CA’s MSP Ambitions

For about the past six months, CA has been trying to master managed services. Some of those moves are yielding results: CA has a relationship with the Ingram Micro Seismic team (as does Nimsoft). And CA is re-architecting ARCserve (the classic backup and recovery platform) for MSPs. In the months ahead, sources say, CA will also seek to plug into a range of MSP-oriented platforms. At the same, CA has been buying up multiple companies: Today’s announcement follows CA’s recent acquisitions of Cassatt, NetQoS and Oblicore and the planned acquisition of 3Tera, CA notes.

But apparently, the biggest priority today is acquiring and managing Nimsoft. And that could trigger competition between CA-Nimsoft and more traditional MSP software companies like Kaseya, N-able, Level Platforms and Zenith Infotech (among others).  But I don’t want to overstate the situation: For the most part, I think Nimsoft competes in the higher-end managed services market, outside of the traditional Microsoft small business market that so many people now associate with managed services.

SaaS vs. On Premises

At the same time, we’re seeing a market dichotomy emerge: Most recent MSP software buyouts involved SaaS-centric companies such as:

  • Citrix Online acquired Paglo in January 2010 (now rebranded as Citrix GoToManage)
  • Quest Software acquired PacketTrap in December 2009
  • GFI Software Purchased HoundDog Technology Ltd. in July 2009.

In stark contrast, Nimsoft is an on-premises solution. No doubt, Nimsoft has been growing rapidly. In his personal blog, CEO Gary Read frequently described recent customer wins and record quarters. And on February 2, Read went on-the-record with MSPmentor, firmly stating that the privately held software company was profitable.

Can MSPs Trust CA?

Now, the key question: Can managed services providers trust CA and the company’s management of Nimsoft? Plenty of VARs recall Computer Associates’ dark days — involving channel conflicts, aggressive direct sales tactics and even questionable accounting practices. But let’s be clear: CA by 2004 was under a new management team. And more recently, the company has hired channel veterans like Toni Clayton-Hine, the co-founder of Everything Channel’s IPED (Institute for Partner Education).

Back By October 2009, CA was formulating an MSP partner strategy — according to this MSPmentor FastChat Interview with CA Senior VP and GM Adam Famularo:

Next Moves

Bottom line: I think CA is very serious about the managed services market. And the company’s DNA has changed quite a bit since an accounting scandal nearly crushed CA roughly a decade ago. Also of note: Buying Nimsoft is more than a managed services move. In addition to the Nimsoft deal, CA sees Nimsoft as a way to move into the so-called “emerging enterprises market, which involves “organizations with annual revenues from $300 million to $2 billion.” Those companies “will account for approximately a quarter of the software spending in CA’s market space by 2013.”

A press briefing with CA executives and Nimsoft’s Read starts in a few minutes. I’ll be back tonight with highlights from the briefing.

Today’s announcement follows CA’s recent acquisitions of Cassatt, NetQoS and Oblicore and the planned acquisition of 3Tera.


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