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March 23, 2005

Systems management consolidation continues

Consolidation in the systems management software market continued on Wednesday as Altris, BMC Software and Novell all made systems management-related acquisitions.

By CBR Staff Writer

IT lifecycle management vendor Altris announced that it is to acquire vulnerability management player Pedestal Software for $65m in cash, while BMC snapped up web access management vendor OpenNetwork for $18m in cash.

Meanwhile identity management and Linux vendor Novell boosted its ZENworks systems management portfolio with the purchase of IT asset management software vendor Tally Systems for an undisclosed fee.

These are just the latest in a series of acquisition in the systems management space since ComputerWire predicted a return to acquisition activity in March 2003 following a period of relative quiet.

Since then we have reported 10 different deals worth a combined $754m, as well as a further 13 systems management purchases of undisclosed value, as some of the big names, including Computer Associates, Hewlett Packard and BMC, have gone about snapping up niche vendors in a series of small-scale acquisitions.

While often seen as a potential acquisition target given its rapid growth and relatively small size compared with the likes of CA, Lindon, Utah-based Altiris has already been on the acquisition trail with the purchase of Wise Solutions in December 2003, FSLogic in February 2004, Bridgewater Technologies in September 2004 and Tonic Software in January 2005.

Altiris president and chief executive, Greg Butterfield, said the company had looked at a number of options before choosing Newton, Massachusetts-based Pedestal and its systems security and vulnerability audit products.

Before making our decision to acquire Pedestal we looked at a variety of security management solutions, he said. We chose Pedestal because they have the best in class technology, their business trajectory is in alignment with Altiris’ model, and we could integrate the products quickly.

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Those products include SecurityExpressions, an audit and compliance software solution for Windows, Unix and Linux desktops, laptops and servers, and AuditExpress, which audits those systems and also delivers pre-interpreted actionable SmartReports.

Butterfield said following the purchase the company saw opportunities in the consolidation of systems and security management in response to compliance requirements. With this acquisition we gain access to the rapidly growing security policy management market with the recent compliancy structure out there becoming top of mind and increasingly expensive for our customers, he said.

Because the majority of desktop and server vulnerabilities are caused by missing patches and configuration errors, the combination of Altiris patch management solution, network quarantining, and recovery will enable customers to significantly reduce their risk.

Butterfield added that the company will continue to offer SecurityExpressions and AuditExpress as standalone products and will also integrate them with its existing foundation and product suites in the next four to six months, and that he expected Pedestal to add revenue between $17m $18m to Altiris in fiscal 2005.

Compliance with government regulations was also at the heart of Waltham, Massachusetts-based Novell’s acquisition of Tally Systems and its software asset management products. Novell CEO, Jack Messman, said bringing together Tally Systems’ asset management technologies with Novell’s ZENworks change and configuration management products would enable the company to deliver functionality for tracking systems, information, and assets.

Privately held Tally Systems was founded in 1990 and operates from its head offices in Lebanon, New Hampshire. As well as selling asset tracking software, the company also offers software for the provision of software deployment tools and utilities for the remote control of desktops.

Novell has been no stranger to acquisitions in recent years, although its previous purchases have been focused around Linux and services, rather than systems management.

Houston, Texas-based BMC has also been making purchases as part of an ongoing strategy to expand its identity management products and enhance its Business Service Management vision.

In late 2002, it picked up the Remedy help desk software from the then-ailing Peregrine. Then in March 2003 it picked up IT Masters for $42m, followed by the assets of Magic Solutions from Network Associates for $47m, adding a small-to-medium focus to the enterprise-scale Remedy helpdesk software.

More recently it acquired change and configuration management vendor Marimba Inc in April 2004, and French identity management software house Calendra SARL in early 2005. The purchase of privately held Clearwater, Florida-based OpenNetwork adds web access management and single sign-on to its portfolio.

OpenNetwork’s Universal IdP product makes use of the data synchronization capabilities in Microsoft’s Identity Integration Server product to enable role-based provisioning across both Microsoft and Java-based environments, as well other systems including AS/400, Solaris, AIX, and SAP R/3.

BMC said the acquisition would expand the company’s identity management offering with identity federation services and also create new business opportunities in the small and medium business space.

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