Computer Associates has acquired 91 companies over its history and during the past year or so has spent about US$1 billion on buy-outs, including those of Aprisma/Concord, Netegrity and Niku. Look for more of the same in the months ahead.
That was the word Monday from Mark Barrenechea, CA's executive vice president of technology strategy and chief technology architect. He spoke at the Emerging Ventures conference in Boston.
Barrenechea shared few details about CA's buyout plans, but did hint at areas of interest.
He described CA as the market leader in both enterprise security and systems management, and says the company will look to solidify its position in both markets through internal technology development and via acquisition. When pressed, he said the IT security market includes subsectors with attractive growth prospects, such as integrated threat management.
"The categories [of malware] continue to grow amazingly fast," he said. "We continue to look at how to make sure we can come to market with an integrated threat management solution not just for PCs, but for servers, operating systems and databases."
Another market that has his attention is security information management, which involves capturing, correlating and filtering security events, much in the way products such as CA Unicenter and HP OpenView address network and systems management.
"IDC reports it's a US$400 million market today and I think that's highly understated," Barrenechea said. "We could see [security information management] being a multibillion-dollar market in five to seven years."
Among non-security-specific areas, Barrenechea pointed to storage and business services optimization as having room to grow.
Were Barrenechea in the applications market, he says vertical industry programs would appeal to him, along with application services such as Salesforce.com's offerings that exploit the Internet. "How about Orderentry.com? How about Benefits.com?" he said. "There's a lot of room to leverage this technology shift."
Barrenechea also addressed the overall consolidation of the software market.
"As I like to say: shift happens," he said. "We are unequivocally in the process of a shift in the major software market. If you look at the applications space, the top four companies have nearly 90% of the market cap and more remarkably, they contribute close to 97% or 98% of all the profit."
His message to those starting software companies is to stay platform-agnostic for as long as possible. Barrenechea said only companies that build their products to work with Oracle software have a chance of being snapped up by Oracle, and only those willing to be part of the IBM ecosystem have a chance of being gobbled up by Big Blue or co-existing with it.
Oracle tends to buy companies to get their installed base, market share and maintenance stream, Barrenechea said. CA tends to look for midsized software companies in new sectors primed for growth, he said.
