Buys, Sells and Alliances

CA Technologies Inc. has reached a definitive agreement to sell its antivirus division to venture capital firm Updata Partners for an undisclosed amount. Meanwhile, Autonomy Corp. purchased Iron Mountain Inc.'s archiving and online backup business, and VMware, Inc. purchased cloud-based IT management solutions provider Shavlik Technologies LLC. Finally, some of technology's biggest vendors released designs for Hyper-V cloud data centers, while others announced the creation of an open-source industry group built atop the KVM hypervisor.

Focal Points:

• CA has sold its antivirus division to venture capital firm Updata Partners. The financial terms of the deal were not disclosed. According to the announcement, Updata plans to form a new company called Total Defense, Inc., once the deal closes in June. CA will retain its enterprise-focused identity and access management (IAM) software business, which fits more closely with its core systems management market, CA added. Separately, Autonomy announced that it is buying Iron Mountain's archiving, eDiscovery, and online backup business for $380 million. The deal adds five petabytes of company data and 6,000 customers to Autonomy's cloud business, Autonomy claims. Iron Mountain's medical records archive and escrow service are not included as part of the deal. Autonomy said that it will spend about $10 million on integrating Iron Mountain into its business over the next two quarters. Moreover, it expects the deal to dilute earnings this year before improving them in 2012.
• VMware announced the purchase of Shavlik, a provider of cloud-based IT management solutions for small and medium-sized businesses (SMBs). Shavlik is also one of VMware's partners in virtual machine (VM) management, and a provider of patch management and network security tools. Financial terms of the deal were not disclosed. According to the announcement, this deal further strengthens the relationship built between VMware and Shavlik via VMware GO. VMware GO is a joint software-as-a-service (SaaS) offering that assists SMBs with rapid deployment and management of VMware vSphere. The combined entity will offer a complete portfolio for managing, monitoring, and securing IT environments with automated IT management, centralized IT management services, and simplified deployment and automation, said VMware. VMware expects the acquisition to be completed by the end of this quarter.
• Cisco Systems, Microsoft Corp., and NetApp Inc. released validated designs for Hyper-V cloud data centers. These designs are part of Microsoft's Hyper-V Cloud Fast Track program. NetApp's storage component is called the "NetApp Hyper-V Cloud Fast Track with Cisco data center architecture." According to NetApp, the design uses Cisco UCS servers and Nexus switches, and NetApp FAS systems running ONTAP. Microsoft components include Windows Server 2008 Hyper-V R2 and Microsoft System Center components, including Opalis Integration Server, System Center Operations Manager, System Center Service Manager, and System Center Virtual Machine Manager, NetApp added. Separately Hewlett-Packard Co. (HP), IBM Corp., Intel Corp., and Red Hat, Inc. announced that they are creating an industry group meant to accelerate the adoption of an open-source virtualization stack built atop the KVM hypervisor. This new group, known as the Open Virtualization Alliance, also includes BMC Software, Inc., Eucalyptus Systems, Inc., and Novell as members. The Alliance is an idea three months in the making, and started with IBM and Novell. According to IBM's director of worldwide Linux, the Alliance is open to adding new members and wants to create an environment that welcomes smaller players.

Experton Group believes Cisco's Hyper-V cloud data centers provides an interesting alternative to its VCE vblock solutions that has given the company a strong third place market share for x86 blade servers. The VCE Alliance (Cisco, EMC Corp. and VMware) is a very tight knit arrangement whereby customers can work with any of the three players and get the same services and support, as these elements are tightly integrated. IT executives interested in the Hyper-V offerings versus the vblocks should include in the selection analysis criteria the engineering integration, pre-build commitments, service and support. The Open Virtualization Alliance (OVA) strengthens the KVM hypervisor, improves its positioning against Hyper-V, and opens the door to development of a common, competitive virtualization management and middleware stack that is expected to compete with VMware's offerings. With VMware controlling most of the virtualization market, OVA has a long way to go. Meanwhile, VMware's purchase of Shavlik further improves its management and security capabilities and makes it harder to catch. Meanwhile, CA remains a major software supplier that cannot seem to get out of its rut. Its sale of its antivirus division will help it better focus on its other offerings and maybe enable it to grow more rapidly. IT executives that utilize CA's antivirus software should work with CA and Updata to understand and limit the negative implications of the sale to their existing software contracts. Lastly, Autonomy's acquisition of Iron Mountain's digital assets dovetails nicely with Autonomy's cloud and information governance vision as well as access to a large customer base, which it can leverage. IT executives using Iron Mountain's digital services should work with Autonomy and Iron Mountain to ensure contract commitments and terms are not impaired by the sale.