February 25, 2010 – CA announced yesterday that it plans to acquire 3Tera, a startup developer of system software for utility and cloud computing.
It is the first acquisition news to come since new CA CEO William McCracken announced plans to spend at least $300 million on cloud computing and security software acquisitions.
3Tera is described as a pioneer in the infrastructure as a service space (IaaS). The company’s AppLogic software serves as the base of a broad range of cloud offerings, enabling enterprises and service providers to provision, deploy and scale both public and private cloud environments.
The acquisition of 3Tera takes CA beyond management software and potentially beyond software entirely as a service provider, wrote Forrester Research analysts James Staten and Glenn O'Donnell in a blog yesterday.
The company will assist CA in streamlining cloud-based deployment of composite applications, adding to CA’s existing virtual and physical infrastructure management, according to the company release.
“If anyone doubted CA Inc.’s intention to get into the cloud computing market, you can’t get away with that skepticism anymore,” Staten and O'Donnell said. “This company is serious. Its acquisition of early cloud leader 3Tera takes their nascent cloud entreaties to an entirely new level.”
While this acquisition may put CA in a position to lead the IaaS market, Forrester’s analysts say the devil is in the details. “Confidential reports from two Forrester clients, who tested out the platform substantially, stated that they found challenges in implementing the software and adapting it to their business needs.”
The same can be said for nearly every IaaS platform in this developing space, however, according to Staten. Nevertheless, acquisitions can pose challenges and integrating 3Tera into CA’s portfolio may take longer that customer’s would like despite its proven proficiency in the recent past.
Despite booming revenue growth in cloud services, the percentage of organizations participating in the pay-per-use model showed little to no growth in 2009, due primarily to concerns about security, according to a December survey of IT executives and decision-makers. The number of respondents using the technology only increased 1 percent to a total of 4 percent in 2009. And, IaaS was the area lacking most in growth and investment, compared to software as a service and platform as a service.
That said, CA is adding AppLogic to its own strengths in IT management, Rachel Chalmers, research director at The 451 Group was quoted to say. “CA is offering an intriguing value proposition to customers who want to both take advantage of the cloud’s adaptability and maintain rigorous control of the their virtual service delivery infrastructure.”
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