CA buys 3Tera: Playing the Cloud Computing Field to find a Diamond in the Rough

CA has announced the acquisition of 3Tera for an undisclosed amount of money.  Like Cassatt, 3Tera is a pioneer in cloud computing and they will join CA’s ever expanding list of acquisitions within Cloud Computing Management.  3Tera is home to AppLogic which started off within Grid Computing and has now morphed into a Cloud Computing Platform.  Per 3Tera’s website, “AppLogic is a turn-key cloud computing platform for running and scaling distributed applications.”

It seems that CA is engaged in “a throw spaghetti at the wall and see what sticks” method of M&A.  Only two of CA’s last four acquisitions have sustainable/notable customer lists (per their respective websites), at least two of the acquisitions have technology overlap between themselves and/or other CA products, and one acquisition may have come with few customers yielding little revenue.  Of course, this may be indicative of the space itself as Microsoft has revealed that revenues are years away from Cloud Computing providers.

Perhaps CA is attempting to become the “arms dealer” of Cloud Computing Management, but that’s a tall order for any company.  HP has spent billions on notable software companies such as Opsware, Peregrine, and Mercury Interactive.  BMC has added BladeLogic, Tideway, and Phurnace to integrate within their Remedy/Atrium products.  Meanwhile, VMware/EMC, Microsoft, and Citrix continue to beef up their management portfolios along with a host of start-ups and disruptive virtualization management companies.   IBM has recently acquired Intelliden to plug a hole within their Tivoli management software and they are the fathers of autonomic computing.  Finally, Cisco lurks as an ever present threat within this space.

For CA to be successful, they must not only continue the development and integrate these products into a single solutions suite, but they must execute on a coherent marketing and sales strategy.  With BMC set to fill the management void left by the rift between Cisco and HP, CA may look to Juniper, Brocade, or perhaps Huawei as potential partners.  If not, CA will be forced to compete with Cisco, HP, and IBM on the back-end of these next generation datacenter build-outs with a management agenda that is often an after-thought.

While I wouldn’t count CA out, they have a lot on their collective plates.  Will CA be able to quickly expand 3Tera to support VMware?  Will CA figure out what to do with Cassatt?  Will CA open new markets to NetQoS?  What about security management?  What will CA do to counter IBM’s purchase of Intelliden?  Will CA’s properly package these new products?

How many acquisitions does it take to create a market within Cloud Computing Management?  One…NetQoS…Two…Cassatt….Three…Oblicore…Four….3Tera….Five…

It’s a great time to go shopping for companies that have money and CA is definitely playing the field in search of that diamond in the rough.

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2 Responses to CA buys 3Tera: Playing the Cloud Computing Field to find a Diamond in the Rough

  1. Jay Fry says:

    All good, intriguing questions, for sure. And time will certainly tell.

    In the meantime, I think we’re (CA) piecing together an approach to help customers get a handle on cloud computing from where they sit right now. I included a bit about how CA’s recent moves fit together in my blog on the 3Tera deal, if you’re interested: http://bit.ly/axXXKz

    • fstrimling says:

      @Jay, As we’ve worked together in the past, I understand the passion for this space. However, evangelistic marketing efforts alone will not help companies in this space as integrated and functional products that solve real problems must be built. Not knowing how much of the engineering teams remain, technical leadership coupled with complex problem solving based on real customer requirements is the only answer.

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