RealTime IT News

Opsware All in For IT Automation

Opsware agreed to buy partner iConclude today for $54 million in cash and stock to fortify its datacenter automation software portfolio.

Privately held iConclude makes IT process automation software called OpsForce, which choreographs everyday tasks necessary to run datacenters.

Automating such mundane processes, also called run-book automation, and applying the correct resources to changes that arise in computer systems takes a lot of the redundant, manual work out of the equation for IT administrators.

iConclude's OpsForce lets users blend ticketing, asset management, source control, monitoring, and operations software from various vendors' IT management systems. The software ships with hundreds of process templates, and integrates with BMC Remedy, HP OpenView, IBM Tivoli and other infrastructure-management systems.

Integrating with other keystone management systems is important because customers don't need to alter or replace their processes to conform with how the software works, Opsware CEO Ben Horowitz said on a conference call today.

"Unlike most competing systems, the software does not force customers to change the way they do business or change any of the tools they currently use," Horowitz said, referring to products from management software giants IBM , CA , HP and BMC .

Horowitz said adding iConclude will give the company a competitive differentiator versus IBM, CA, HP and BMC in what IDC expects will become a $10.4 billion server automation software market in a few years.

"Clearly the prize for winning this race is huge, and we're in the pole position," Horowitz added.

Should IBM, CA, HP or BMC choose to answer Opsware's challenge, they will have a limited pool of startups offering IT process automation. Opalis and RealOps are the two other main providers in the market.

With a marriage of Opsware's change-management and compliance products and iConclude's process automation, Opsware claims it will meet process compliance initiatives outlined by the Information Technology Infrastructure Library (ITIL) specifications.

Those synergies notwithstanding, Opsware is already well acquainted with iConclude, thanks to a strategic relationship the two vendors announced in November. In that arrangement, Opsware licensed iConclude technology for its Orchestrator product.

Should the deal close in May as expected, Opsware will pay $30 million in cash and 3.39 million shares of its common stock for iConclude. Based on Opsware's Monday closing price of $6.98, the stock value is $23.7 million. Opsware will retain almost all of the iConclude employees.

Opsware today also reported that net revenue for the fourth quarter totaled $29.6 million, up 59 percent from the same quarter last year. Full year revenue for 2006 totaled $101.7 million, up 67 percent from a year ago.

The company expects first quarter earnings of $26 million to $27 million, a loss of a penny to 2 cents per share. Analysts had been expecting earnings of 2 cents per share on sales of $29.1 million.

For the full year, Opsware expects adjusted earnings between 9 cents and 13 cents per share, and sales between $142 million and $147 million.