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Active Directory Player To Join Quest

Quest Software, which makes management software tailored for Microsoft platforms, agreed to acquire smaller rival Aelita Software for $115 million in cash.

Should the purchase succeed, Quest would fortify its Microsoft management portfolio. Aelita is considered a leading provider of systems management software that improves performance in Microsoft's Active Directory and Exchange environments.

Exchange is Microsoft's server software for its ubiquitous e-mail program. Active Directory is a feature within Windows 2000 and 2003 servers that allows companies to manage the programs and systems their employees use.

"Active Directory provides employee provisioning as a single authoritative source about your users," said Aelita spokesperson Carrie Reber.

The deal signals the ongoing consolidation in the enterprise software sector as larger companies swallow smaller rivals in order to compete with major vendors such as Microsoft, IBM and Oracle. At the same time, management software continues to be a hot topic with enterprises that are looking to automate their software infrastructure.

Aelita specializes in migration and backup and recovery for Microsoft environments, while Quest is noted for its prowess in performance management, troubleshooting and Active Directory management. In an added twist, the deal could help Quest compete more effectively with Microsoft.

Reber said the deal would allow Quest to offer a more comprehensive suite of management software. While Microsoft provides native support in its operating systems and platforms, Reber said Quest and Aelita have been able to successfully sell third-party management tools because customers often find them easier, particularly if they're performing high-volume migrations.

Quest Software CEO and Chairman Vinny Smith said the deal, which would bring Quest's customer roster from 18,000 to 21,000, is an attempt to give customers more choice under one umbrella.

Executive teams from Quest and Aelita are currently working on a phased integration plan to merge the two companies' organizations. Until then, Quest's Microsoft infrastructure management products and Aelita's software will continue to be developed, marketed, supported and sold as complementary products.

Aelita President and CEO Ratmir Timashev will lead the Quest Microsoft product business.

Columbus, Ohio-based Aelita has about 400 employees and 3,000 customers, which will be tucked into Quest. The acquisition is expected to be completed by the end of the first quarter 2004.