Software Buying Spree
By Amy D. Wohl*

The past year ended with a grand software buying spree. Everyone seems to be buying someone and we’d expect this activity to carry right on into the New Year. In fact, this kind of buying activity often carries within itself a lot of incentives to continuing:

• Companies who get one good buy probably looked at quite a few interesting candidates. They may decide to buy another of them.
  
  
• Companies who identify themselves as buyers (especially as well-paying buyers) will find themselves the recipients of lots of offers to be considered, often from companies they didn’t know were available.
  
  
• Companies who see good players being bought may feel pressure to buy up companies they have been considering before they “get away.”
  
  
• Companies may believe (we do) that a portfolio mentality has taken over in the larger system and software companies. This means they believe that they must have complete strategies and they must have them now or very soon. Therefore, buying available IP rather than waiting to develop it internally becomes very appealing. Companies who considered themselves focused on narrower specialties may decide that they have to broaden into a portfolio concept in order to compete.

And so the games begin and so they will continue – at least for a while.

IBM Sees Green(Er) Pastures

IBM has been working on a complete enterprise content management strategy for quite some time and with the acquisition of Green Pastures it may be time to start consolidating its considerable intellectual property.

When IBM’s Janet Perna announced the acquisition on December 17th, she told us that Green Pastures would be easy to integrate with existing IBM products and with two other content-related products purchased earlier this year, Tarian for record management, and Aptrix for Web content management. All three companies were IBM partners who had done extensive work to make their products integrated with DB2 and that makes it much easier to bring the products together into a single strategy going forward.

It’s clear that IBM has the broadest and most successful enterprise content management strategy so now the question will be whether others will simply accept that fact and attach to it, playing for the niches, or whether some will try to put together a competing portfolio approach. It has been suggested, for example, that FileNet and Oracle might form the basis of a strategy, with appropriate additions. Also, EMC’s acquisition of Documentum hints at the beginnings of a rival strategy, but so far not a very complete one, since EMC is not a systems company and does not field a database product of its own.

We’d give this round to IBM. We are wondering if Microsoft is planning to have an equivalent offering in this market.

EMC Extends Its SW Business With VMware

EMC is starting to pop up in a lot of new places. We noted it above in the enterprise content management discussion, because of its acquisition of Documentum.

Here we note its recent purchase of VMware, permitting it to offer server and storage virtualization, supporting multiple operating systems, including Windows and Linux, which may run simultaneously on the same Intel-based infrastructure.

In some sense, while we assume EMC has made this acquisition to further its move into the software business (when added to its previous acquisitions of Legato and Documentum), and permit it to be classed as a potential vendor of Utility Computing offerings, we’d guess that Microsoft may now find them a threat. That’s because the VMWare acquisition will permit EMC to craft offerings that could compete with Microsoft’s Connectix acquisition. But while Microsoft uses Connectix to “help” customers move away from non-Windows offerings, EMC will no doubt be using VMWare to offer ongoing support to heterogeneous operations. Too, while Connectix is more focused on desktops, VMWare is server-centric, and will place EMC firmly in the data center, just where it wants to be.

Industry sources indicate that there is a fair amount of integration, which will be required for VMWare to work smoothly with other EMC products.

Citrix Acquires Expertcity

Citrix has been looking for an acquisition for a while. When we visited them during their annual analysts’ briefing in September, there were many hints that they were “out shopping.”

The Expertcity acquisition will let Citrix move from its focus on the server, where it provides resources for over 120,000 customers and 50 million users worldwide, to a new focus on the desktop.

Expertcity offers web-based desktop access via their popular GoToMyPC and GoToAssist products. With this acquisition, Citrix will be able to offer its customers not only web-based access, but also web-based training and customer assistance, based on Expertcity’s infrastructure, customer help desk and other software and services. Citrix will pay $225 million in cash and stock for the deal (plus a $12 million performance kicker).

This gives Citrix an offering in the SMB space, which may have been too value-conscious for previous Citrix offerings.

Expertcity will continue to operate in Santa Barbara, Calif., led by Andreas von Blottnitz, Expertcity’s current president and chief executive officer.

Red Hat Scales Out With Sistina

Red Hat has announced intent to purchased Sistina Software, a storage infrastructure company, to provide its enterprise Linux customers with a means to virtualization and to offer (hardware) vendor-independent storage solutions.

This is in line, we would suggest, with Red Hat’s plans to provide an Enterprise systems infrastructure solution to its customers, and not to be simply a Linux distribution, making its living by providing software integration and consulting and support services.

Sistina offers a number of storage management software products.

Red Hat plans to close the deal in January, with the payment of $31 million in newly issued stock.

*Reprinted with permission from Amy Wohl’s Opinions. Further copying, without permission of the copyright holder, is explicitly forbidden.

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