Making CA More Wily
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CA's bid to acquire Wily Technology will help the company become a lot more formidable in the multi-billion-dollar management software space, analysts said.
Wily specializes in application management software that allow IT managers to detect and diagnose application slowdowns and failures as they occur and before they negatively impact system performance.
Wily's software manages billions of Web transactions daily for customers who depend on Wily without even knowing it.
For example, Wily's software manages the online reservation applications for Starwood Hotels; every FedEx.com order placed online; and all of the online booking and customer service transaction at British Airways
There are no shortage of these types of vendors in the market, including IBM, HP, Symantec, Mercury Interactive and BMC.
But CA and Wily officials claimed on a conference call Thursday that no one picks over applications with such a fine-toothed comb as Wily, performing very fine-grained analyses without impeding application performance.
"We enable customers to take data and turn it into actionable information," said Wily Founder and CTO Lewis Cirne, who will join CA and help with the integration efforts. "We deliver value in ending the finger pointing of who is causing the problem."
Wily's 450 customers and Wily's annually improving results might attest to that.
On the call, CA CEO John Swainson said Wily's revenues grew by 48 percent in 2004, with 2005 revenues expected to increase 75 percent to the tune of $53 million, or more than three times as fast as the growth of the market segment.
Swainson also said Wily has added an average of 35 new Fortune 2000 customers per quarter for the last six quarters. He attributed the surge in application-management demand to the fact that most large operations are moving their business processes to Web applications.
"Without application management, you just can't effectively manage the entire enterprise," the executive said.
Gartner analyst Cameron Haight expects the market to top $1 billion in 2007, with promising growth on the horizon as more and more companies look to ease the way their transactions are piped over the Web.
Haight said CA made a strong statement in the New Year by going after Wily, giving the company credibility in a market where they had very little.
"Their application management focus has been an area of wanting," Haight said. "This gives them a very strong contender in the J2EE segment and some extensions because Wily had branched out beyond just J2EE, doing MQSeries and other parts of the middleware spectrum.
Haight said CA still has some holes to fill, though. For example, it doesn't have a particularly strong offering for [Microsoft] Exchange, SAP and Oracle applications. But he said CA bought into one of the faster growing parts of the application management business.
Haight said CA will have a vendor in Wily that consistently ranks as a leader in its Magic Quadrant profile for J2EE application server management. Wily has done so well in part because it was a first-mover in the commercial market for granular inspection of application server health, he said.
"The big issue is the Wily customers," Haight said. "In the past, this may have been viewed with some degree of apprehension. But over the past 12-18 months, with the acquisitions of Niku, Concord and Netegrity, CA has shown the ability to retain many of the key players and grow those businesses."
As Haight pointed out, the bid is a sign that CA hasn't lost a step in its busy acquisition strategy from 2005, when it picked up e-mail archivist iLumin, compliance manager Niku and systems manager Concord Communications.
Swainson promised Islandia, N.Y.-based CA would be more acquisitive when he joined from rival IBM in November 2004.
On the micro level, the Wily deal is the latest play to help the company sculpt its strategy for helping customers unify and simplify the management of IT across the enterprise.
Or as Swainson said on the call: "to allow organizations an unprecedented level of command over their IT environments."