CA is a vendor that already enjoys a leading position in overall network management. Its 2005 acquisition of Concord, which brought along the assets of the previously acquired Aprisma, instantly moved CA from an also-ran to one of the clear leaders. Concord was good, and CA has an impressive track record of growing that business since the acquisition. Still, there were some weaknesses with regard to more advanced performance analysis.
On September 14, 2009, CA finally addressed these performance gaps by announcing its intent to acquire NetQoS for $200 million. Based in Austin, TX, NetQoS is one of those exciting small companies that proved there is a better approach to many of the challenges we face. It is one of the true innovators in performance management of both infrastructure and applications.
The combination of the two is a compelling proposition for network management. CA’s Spectrum is recognized as a leader in fault management, both in sheer installed base as well as technical merit. The eHealth side of the business (the original core Concord business) has been popular for performance monitoring and reporting, but the analysis from NetQoS is far superior. This is where the action now shifts in network management as well as other domains such as virtual servers, storage, and applications. The merged product line positions CA in a formidable position to capitalize on the growth areas of network management.
Network Management is a corner of the IT Management Software market that has been written off by many as boring and obsolete, yet we project that 2009 sales of network management products will be slightly less than $3.5B, or 17% of the overall IT Management Software market. This represents a 4% increase in raw spending over 2008. Granted, Forrester’s growth projection for 2009 in the broader IT management software market is 9.5%, so network management is lagging behind the overall market. Still, almost no IT spending is on the increase this year, so this is notable. Clearly, there is still demand. Network Management is hardly a dead market!
Certainly, many vendors are strong point players, but only a few can provide broad-based network monitoring and analysis for both fault and performance management, as well as configuration and change management. These powerhouses include:
- HP, which holds a longstanding leadership position centered around Network Node Manager and bolstered by the Network Automation product that came with Opsware (which it acquired with Rendition Networks).
- IBM, through the 2005 acquisition of Micromuse, gave it superb network discovery and fault management, along with a good set of performance monitoring capabilities. Prior to Micromuse, IBM’s Tivoli division was very weak in the network domain. Now it is clearly in the lead pack.
- EMC, the storage king that made its foray into the network with its 2005 Smarts acquisition. Smarts was, and still is, a phenomenal product for network fault management. In 2007, EMC added to its arsenal with the Voyence acquisition for NCCM. It still lacks a compelling performance-oriented story, but it is also among the leaders in network management.
We believe CA will augment much of its product line with NetQoS rather than replace it. There are obvious overlaps, but more opportunities to strengthen what already exists.
Is the new CA a potentially undisputed leader in network management? Possibly. The fault and performance combination is tough to beat. If a stronger network configuration and change management component existed in the CA portfolio, linked by its Unified Service Model and orchestrated by components of its Spectrum Automation Manager, the answer to the question would be a firm, “Yes.”
More importantly, the NetQoS technology promises a stronger position beyond network management. The need to gain better insight to performance, and especially application performance, is one of the most overwhelming issues still facing IT. If CA properly leverages the NetQoS portfolio, it can significantly bolster its server and application performance story. Many of the analytical algorithms extend beyond the network, so other management domains can benefit. NetQoS brings some attractive application performance management technology that should mesh with CA’s Wily product line. Here again there is some overlap that must be reconciled, although the two work in different ways and a hybrid that takes the best of both is very appealing.
NetQoS has been successful because it innovated in an area that most other vendors ignored. It is a relatively small company, but we expect it to have a big positive impact on CA and its customers.
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