CA Nabs NetQoS for $200M

In yet another sign that the telecom back office is growing in importance, CA Technologies (Nasdaq: CA) today announced it will buy Austin, Texas-based performance management specialist NetQoS Inc. for $200 million in cash. (See CA to Buy NetQoS and OSS World Wakes Up.)

That might seem like a big price tag for a privately held software firm with 1,000 customers and annual revenues (in 2008) of $56 million. (See NetQoS Monitors Apps , NetQoS Reports 2008, and NetQoS Offers Managed Service.) But CA, which bolstered its telecom software portfolio significantly with the acquisitions of Wily Technology in 2006 and Concord Communications in 2005, and which claims to have more than 200 service provider customers for its service assurance products, has a very clear idea about how the two companies' product portfolios will fit together and meet the needs of carriers and enterprise customers alike. (See CA Gets Lean, CA Enhances Its OSS, CA Makes Wily Acquisition, and CA Targets Telcos With OSS.) Here's CA's take on the combined strength of the two players:

  • Network and Systems Management: "The combination of CA eHealth Network Performance Manager, CA Spectrum Infrastructure Manager and the NetQoS Performance Center will give CIOs and network engineers and operations managers better visibility and control of critical services in their physical and virtual network and systems environments. This will enable customers to flexibly and efficiently deliver high-quality services such as unified communications."

  • Application Performance Management: "By linking transaction views to the infrastructure, CA Wily Application Performance Management and the NetQoS Performance Center will enable a new level of quality of experience, in which the infrastructure is application-aware. This 360-degree view of applications will provide customers both an outside-in and inside-out perspective of their business and IT services, something no other single vendor can provide." [Editor's note: Customers will need to make sure they don't turn themselves inside out too often -- that can get rather uncomfortable.]

  • Cloud Management: "CA’s acquisition of NetQoS builds on the assets CA acquired from Cassatt earlier this year, as well as CA’s organically developed CA Spectrum Automation Manager for dynamic performance-based automation of physical, virtual and cloud computing environments. As enterprises and service providers become increasingly reliant on the shared infrastructure of private and public computing clouds, CA and NetQoS will provide a robust level of network and systems traffic management that will be critical to successfully delivering cloud-based services." (See CA Acquires Cassatt Assets.)

    Though maybe not as visible or as vocal as some other OSS players, CA is believed to be among the biggest providers of software to carriers in terms of revenues. While the company does not break out its revenues, industry insiders believe CA generates more than $200 million in revenues from telecom operators each year. If that figure is in any way accurate, that would account only for a small portion of CA's total sales: In its full financial year to March 31 2009, CA generated revenues of $4.27 billion.

    Other recent M&A action in the telecom software world includes:

  • Telcordia Invests in OSS Specialist
  • OSS News: Tektronix Strikes Again!
  • Ericsson Offloads OSS Unit
  • Intel Backs OSS Firm

    — Ray Le Maistre, International News Editor, Light Reading

    Interested in learning more on this topic? Then come to OSS 2.0: Driving the Services Revolution, a one-day conference for the service provider looking to adapt and transform its OSS for the emerging world of explosive service delivery. To be staged in London, October 14, admission is free for attendees meeting our prequalification criteria. For more information, or to register, click here.

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