Opsware Offers $33M for a New Rendition

Opsware agreed to acquire network device automation specialist Rendition Networks for $33 million in cash and stock.

The offer includes $15 million in cash and 2.68 million shares of Opsware stock. Should it succeed, the agreement will give Opsware a new addition to its automation software portfolio, which the company poses as a significant piece of infrastructure for utility computing.

Opsware already automates Unix, Linux and Windows servers, as well as software and applications. By adding Rendition Networks and its TrueControl product, it will be also able to automate routers, switches, firewalls, and load balancers for financial services firms, government agencies and telecommunications companies.

Opsware President and CEO Ben Horowitz discussed the benefits of the merger on a conference call Thursday.

“The combination will allow IT to automate all application infrastructure and enable automation of the complete operations lifecycle of Web-based applications,” Horowitz said. “This combination will make other IT automation systems seem primitive in comparison.”

The executive explained that customers who need to increase capacity on an
application may need to add more Web servers. But by doing that, they need
to reconfigure load balancers, switches and applications servers to accept
connections from the new servers.

While engineers can do this with separate tools, it takes a lot of time and
has greater possibility for human error.

For example, making changes on a business service requires synchronizing
server and software changes with firewall re-configurations. Administrators
who aren’t quick or careful may leave a window in the network for viruses or
intruders to slip in and wreak havoc.

Rendition’s software, used by Microsoft, Nortel Networks and Target, will
alleviate that burden, synchronizing change across the network in one shot.
TrueControl, along with Opsware software, also helps clients make sure their
applications meet regulatory requirements such as Sarbanes-Oxley, SEC 17a-4
and HIPAA.

Tabbed by IDC as a $5 billion market by 2008, automation is key for utility
computing. This is an emerging technology strategy that banks on the idea
that software should manage many of the tasks on a network on the fly,
including server provisioning and patch deployments. The idea is to free up
engineers to do other tasks.

Opsware, IBM , HP , Veritas Software and several other vendors are creating their own brand of
utility computing. By adding Rendition, Opsware will make a huge leap in
progress.

Upon completion of the deal, Opsware plans to integrate TrueControl with the
Opsware System as well as offer both products stand-alone.

Horowitz said the integration is likely to go swimmingly, as both products
support the Dynamic Computing Markup Language, which was created by
Opsware, Computer Associates and EDS a over a year ago to foster data center
automation and utility computing.

Led by its CTO and Co-founder Eric Johnson, Rendition will remain in
Redmond, Wash. and will report to Horowitz.