Update: CA to acquire Wily for $375 million cash

CA has agreed to buy application management software vendor Wily Technology for $375 million in cash, the companies announced Thursday.

Wily's software monitors the performance of applications and lets IT managers diagnose bottlenecks and other problems. CA, formerly called Computer Associates International Inc., said the acquisition will extend its own line up of management software, which is focused mainly on managing computer hardware and user identities.

While CA has tended to approach systems management from a data-center viewpoint, Wily has adopted a developer and application management perspective, according to Mark Barrenechea, CA executive vice president of technology strategy and chief technology architect. "We looked into the market over the past year," he said in a phone interview Thursday. "Wily stood out as a very clear market leader."

With Wily as part of CA, the company hopes to provide an application management platform to manage all kinds of applications, from packaged software such as Microsoft's Exchange groupware and SAP AG's enterprise applications to custom applications built around Sun Microsystems' J2EE, Barrenechea said.

Picking up Wily gives CA solid technology and an experienced sales team covering an area CA has struggled with, IDC analyst Stephen Elliot said. The application management software area requires expertise CA, which deals more with infrastructure management, hasn’t had, he said.

CA Chief Executive Officer John Swainson agreed with that assessment. CA is one of the "slugs" in the crowded application management market, he said in a conference call with analysts.

"CA has some offerings, but not the depth and breadth required by out customers. So we went out to find the best player in the marketplace," Swainson said.

If the deal passes muster with regulators, Wily will become a division of CA's Enterprise Systems Management business unit. Wily's chief executive officer, Dick Williams, will join CA to lead the division. Lewis Cirne, Wily's founder and chief technology officer, will also join CA. Wily is based in Brisbane, California, and CA in Islandia, New York.

The companies aren't saying yet how their product sets will be linked up; CA will publish a road map about 30 days after the deal closes. That's expected in about three months pending the regulatory approvals, CA said.

"There's a very, very small amount of overlap of all components" from CA and Wily, Al Nugent, CA senior vice president and general manager of Enterprise Systems Management (ESM), said. The overlap is mostly in relation to an acquisition CA did in the Web services management space of Adjoin Solutions in 2003, he added.

CA plans to use the same approach with Wily as it did when the company acquired Niku into its BSO (business service optimization) group, which it announced in June, according to Nugent. "We'll run it [Wily] as a separate business and hopefully maintain its focus," he said. The division of CA's ESM business will be called the Wily Technology division. CA will also, as in past acquisitions, retain sub-branding, so the Wily Introscope product name will continue, Barrenechea said.

CA plans to retain most of Wily's more than 260 employees, it said.