Wow, big news yesterday! CA acquired Nimsoft for $350MM to access the MSP/cloud markets and to blend them into their portfolio of cloud offerings. This acquisition is interesting for many reasons, most notably for CA’s stance that they will use Nimsoft’s offerings to access the mid-market (or emerging enterprises in CA parlance).
Mid-enterprises (under $2 Billion in revenue) are struggling with how to monitor their physical, virtual and cloud resources with minimal budget and staff. Nimsoft has aggressively marketed itself to large enterprises as a ‘Big 4’ replacement and its price and complexity reflect this. CA’s acquisition of Nimsoft pushes them further out of reach for mid-enterprises and we expect them to be even less competitive in this market moving forward.
If you are a mid-enterprise company here are a number of reasons why this is not a good deal for you:
1. Increased Risk: There is risk investing in a product that doesn’t have a clear future. We question if this product will even remotely resemble itself in 12 months.
2. It’s now a CA Product: Companies are no longer buying Nimsoft, they are buying a CA product. Anyone looking to move away from a Big 4 framework because of cost, complexity or support reasons should take care.
3. Focused on MSP: CA’s plans moving forward involve using Nimsoft for their MSP offering. If companies are looking at Nimsoft as an all-in-one solution, it looks like Nimsoft may be forced to focus on MSP by CA. If you aren’t an MSP, there might be reason for concern.
4. Nimsoft isn’t a Mid-enterprise Product: They focus on ‘Big 4’ enterprise replacement, just visit their website to see their market positioing on that. Accordingly, their complexity and cost is closer to ‘Big 4′ than mid-enterprise. As a part of CA, Nimsoft will move even further out of reach of the mid-market.
5. CA doesn’t Sell to the Mid-enterprise Market: Mid-enterprise solutions need to be complete, easy-to-use, value priced and have great support. You should be skeptical that CA can provide that, given their track record.
All in all, the excitement in the system’s management space continues to be interesting (and shrinking).
Alex
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Hi there Alex,
Thanks for blogging about our acquisition – obviously a game-changer for you I guess.
I think your opinions have been somewhat clouded (excuse the pun) by your current employers – if I may, I would like to balance the argument:
1. Increased Risk: Do you want to risk investing in a product that doesn’t have a clear future. You should question if this product will even remotely resemble itself in 12 months.
Risk is an important factor in customers’ decision making. However, all this acquisition does is reduce risk. CA are buying the company – and according to their statements, will keep the team. However, these are just words, so it is better to look at the intentions behind the deal to understand what is likely to happen. CA don’t sell to the midmarket. They are looking to the Nimsoft product and team to add revenue in this space. Why would they then kill the product development for this?
2. It’s now a CA Product: You are no longer buying Nimsoft, they are buying a CA product. Anyone looking to move away from a Big 4 framework because of cost, complexity or support reasons should take care.
Because we will have a CA badge on our product, it doesn’t automatically add complexity, cost or challenges with support. As previously stated, the team is staying (including support), and the complexity issue is just plain daft. The product doesn’t change overnight to being a complex product because of its ownership. Re the cost, again the reason for buying us is because of how we price for mid-market – subscription, pay as you use, easy to do business with.
3. Focused on MSP: CA’s plans involve using Nimsoft for their MSP offering. If you are looking at Nimsoft as an all in one solution, it looks like Nimsoft may be forced to focus on MSP by CA. If you aren’t an MSP, there is reason for concern.
Not sure where you are coming at with this. At your last client site visit, didn’t the IT team talk about their customers? What amazes me is the similarity between MSPs and mid-size enterprises. If anything, our focus on MSP will ensure we continue to be at the cutting edge of support for new technologies and provide depth into those applications. Customer satisfaction, good support, excellent product all translate across the verticals.
4. Nimsoft isn’t a Mid-enterprise Product: They focus on ‘Big 4’ enterprise replacement. Accordingly, their complexity and cost is closer to Big 4 than mid-enterprise. As a part of CA, Nimsoft will move even further out of reach of the mid-market.
I guess this depends on your definition of mid-enterprise. We don’t really play in the small space – <25 servers, but anyone larger than that is welcome to take a look. We have extremely satisfied customers – both on complexity and cost.
5. CA doesn’t Sell to the Mid-enterprise Market: Mid-enterprise solutions need to be complete, easy-to-use, value priced and have great support. You should be skeptical that CA can provide that, given their track record.
This one is the comment that made me reply. This is the EXACT reason why CA bought us and are running the team as a separate business unit – they recognise that they don't sell to the mid-enterprise and they want Nimsoft to handle this for them. Have you read the press release? Have you listened to the investor call?
Alex, again – thanks for the flattery of blogging about this deal. See you in the field!
M
Mitch,
I always love a great dialog between competitors, ultimately we are all “partners” in improving the field, and ensuring that people have more choice when it comes to a vision for our respective products and services. It is also pretty flattering that Nimsoft has posted to our blog to manage the perception of the acquisition.
The difference between the vision for an acquisition and the reality of the execution are two totally different things, and we know where the majority of acquisitions stem from a technology and client base perspective. Your clients understand intuitively that either CA wants your technology, which means 8-12 months of turmoil as NUMBUS gets integrated with the other products that CA bought on their shopping spree OR if you were just purchased for client base – which would mean in fact your technology will not continue to be developed in the same manor. As you have stated yourself it’s more of the former and less of the latter, that doesn’t mean your clients have less risk.
Kenneth
(Uptime Solutions Architect)
P.S – I have a feeling I will continue to enjoy it when I see Nimsoft in the field. See you out there.
Well put and written.
-mike
[...] experience. And now, no matter how you slice it, Nimsoft is now a part of the Big 4 which has to translate to Big Problem. You have only to read the comments on Nimsoft CEO Gary Read’s blog post on it to see the [...]
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