By Ann Silverthorn
—Yesterday, CA announced that it has made another acquisition—this time data-protection vendor XOsoft. The acquisition will allow CA to round out its line of ARCserve backup and restore products with replication, high-availability, and continuous data protection (CDP) functionality from XOsoft. At least two industry analysts applaud the acquisition—albeit with a few caveats.
"This is a good move for CA," says Brian Babineau, an analyst with the Enterprise Strategy Group. "XOsoft excels in its strong portfolio with synchronous and asynchronous replication and the ability to do disaster-recovery testing. CA wanted to evolve the ARCserve portfolio to include more offerings—not just replace what they have, but include more CDP and replication. Customers need this because the value of their information is constantly increasing."
Dave Russell, research vice president for the Gartner IT research and consulting firm, says he's usually somewhat moderate on acquisitions, but he thinks this one makes a lot of sense. "It's not just a case where one very large company bought a niche technology or company. XOsoft has quietly amassed a large customer base—in excess of 1,600 users. CA got replication, high-availability, and CDP out of the deal, all of which were weaknesses in the CA portfolio," says Russell.
Russell also thinks that CA has gained some credibility from the deal. "CA has been struggling a bit to define its identity in the storage world," he says. "This acquisition will help the company follow through on its vision of having a command-center focus instead of a bunch of point solutions for clustering and backup and replication."
However, as usual with acquisitions of this nature, product integration will be critical. "Having some methodology to integrate these technologies so that the end-user clients and administrators don't have to struggle with how to implement them will get CA some much-needed positive visibility in the marketplace," says Russell.
Rounding out CA's portfolio
Bob Davis, senior vice president and general manager of CA's storage business unit, says XOsoft was attractive to CA partly because of its strong performance. "XOsoft has grown 25% to 30% quarter-over-quarter for the last three years," he notes.
"The XOsoft acquisition brings a totally new set of capabilities to our product line," adds Davis. "Our product line in the recovery management space is ARCserve for Backup and the family of ARCserve products that provide traditional backup and recovery for servers, applications, and desktops. The addition of XOsoft's replication, fail-over, and CDP to the product line gives us a full suite of backup capabilities that match customer needs."
Gil Rapaport, vice president of marketing for XOsoft, says, "This deal will enable CA to provide its branch office solutions with centralized or remote backup. XOsoft's WAN technology will enhance CA's backup technology."
Some of the XOsoft products that CA plans to continue to support and incorporate into the ARCserve line include WANsync, which provides replication, data distribution, and data consolidation; WANSync HA, a high-availability fail-over solution; Enterprise Rewinder, which features CDP; and Assured Recovery, a backup environment reporting product.
Davis says the XOsoft products will take on the CA brand, but that it will be done gradually.
XOsoft comes to CA with a plethora of partnerships in tow, most notably with BMC Software and IBM. CA's Davis says, "We're committed to maintaining the traction XOsoft has gained with both BMC and IBM and all the other partners."
Gartner's Russell thinks CA is saying the right things about the future of XOsoft's partnerships, and Babineau says there's nothing CA would like better than to have its competitors sell its technology.
"These situations are always left to after the acquisition closes," says Babineau. "IBM will make its own decision. Maybe it will maintain the relationship from a service standpoint but stop selling the technology or supporting it. IBM didn't have a replacement for iLumin and it stopped that relationship pretty fast."
Babineau notes that the XOsoft acquisition is CA's third in just nine months. "CA needs to show customers that it can deliver the technology and provide customers with solutions they can work with. CA has to emphasize the progress it has made with recent acquisitions."
Some modest progress has been made since the iLumin acquisition last year, according to Babineau. "CA has increased the iLumin customer base by about 30% since the acquisition. It's too soon to tell about its acquisition of [records-management company] MDY."
Babineau says CA should also emphasize the "people assets" it has acquired and that retaining employees will accelerate the time to market and time to benefit for its customers.
Gartner's Russell agrees about the importance of retaining XOsoft employees. He says, "XOsoft has around 100 talented people, and you don't acquire more than 1,600 customers without having a good solution. It certainly wasn't the marketing. They had to make it on the merit of the technology itself. That speaks to the importance of the engineering talent."