Tom Petrocelli's take on technology. Tom is the author of the book "Data Protection and Information Lifecycle Management" and a natural technology curmudgeon. This blog represents only my own views and not those of my employer, Enterprise Strategy Group. Frankly, mine are more amusing.

Friday, July 21, 2006

CA and XOSoft

In the past week or so I have had a lot of people ask me what I thought about the recent acquisition of XOSoft by CA. Overall the questions range from the overarching "Why did CA buy XOSoft?" to the more pointed "Isn't XOSoft worried about CA's reputation?" Here's my two second analysis.

  1. CA Wins - CA needs to fill out their product line. With CDP and Replication technology from XOSoft, CA has one of the most complete data protection product lines in the industry. CA customers will soon have a complete, well integrated basket of data protection tools to draw from. CA also gets a willing partner and doesn't have to pay a premium needed to acquire an unwilling one.

  2. XOSoft Wins - Besides the obvious monetary gain for XOSoft founders and investors they now get access to big company resources and the entire range of data protection and security products that CA offers. Let's face it, CDP is becoming a feature. XOSoft would have had to acquire someone (a small or distressed cmopany with the obvious problems associated with that) or would have become a niche player catering to the "I hate the big guys" crowd. There's not much of a future in that.

  3. CA's Reputation - This is still a problem. Everyone thinks of CA as having questionable (at best) business practices and slow, inattentive, and non-responsive product development. While that's changing, it will be awhile before CA can change the industry's perception of itself. From CA's point of view, bringing energetic young companies into the fold helps this along. For the folks at those companies, it means having to manage an issue they have never dealt with.

  4. XOSoft Customers - Come on now. You didn't really think these guys were going to stay independent forever. You can now look forward to getting a well integrated data protection and security suite rather than cobbling one together on your own. It was inevitable and is beneficial in the long run.

Ultimately, it was best for XOSoft to take the deal with a known partner rather than wait on the sidelines until all the other CDP companies were gone. If they had done that, they would have been faced with limited choices and probably a lower selling point. If they had continued to stay independent, they would have been pushed to the back of the room, forever a small niche player with limited growing room. For CA, they get a quality purchase that fills out their product line, making them much more competitive. Sounds like a good deal to me.

As to the CA rep, remember what Timon says in the Lion King "You have to put your past behind you". At some point the industry has to give CA a chance to move beyond it's past indiscretions. The XOSoft acquisition is a step in that direction.

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