CA Acquires Wily Technology

The $375 million all-cash purchase is expected to close in about three months, pending regulatory approval, according to CA, Islandia, N.Y.

CA wants Wily because enterprise customers&' Web-based applications are becoming more critical to their profitability as commerce moves online, said CA President and CEO John Swainson. Plans call for Wily to operate as The Wily Technology Division, a separate entity within CA's Unicenter business unit.

Ultimately, CA aims to integrate Wily's Web application tools throughout its product portfolio, which includes management, storage and security software, Swainson said. "[Wily] will become an increasingly important part of our overall management suite," he said.

Wily products support the online presences of Starwood Hotels, and British Airways, as well as Cingular's customer service portal, according to Swainson. Wily&'s technology can rapidly detect and diagnose online application failures, which helps improve customer service, revenue streams and productivity, he said.

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Wily's Web-based application products also integrate with infrastructure management products from Sun Microsystems, Hewlett-Packard and IBM, as well as with software from SAP, which will open up new revenue opportunities for CA, Swainson said.

Of Wily's 450-plus customers, about 100 are CA customers, said CA CFO Jeff Clarke. Going forward, CA aims to make those customers its own, he said.

Wily Technology CEO Dick Williams, who will run Wily division at CA, said about 90 percent of Wily's North American revenue stems from direct sales. Most of the company&'s Asia-Pacific sales are indirect, and its European sales are nearly equally split between direct and indirect. The average deal size is about $200,000, he said.

Most of the approximately 250 Wily employees will be retained by CA, according to Clarke. An integrated product road map is expected in about 30 days, he said.

By acquiring Wily, CA puts pressure on BMC Software and HP in the infrastructure optimization arena, according to a report released Thursday by analysts at Lazard Capital Markets, a New York investment firm.

"We think the acquisition will ultimately force the hand of BMC and HP, as IBM and CA are looking more like the lead horses in the race," the Lazard report said. "We also think that [CA's purchase of Wily] will create more direct competition among large vendors, including EMC and Symantec, which both have sights set on expanding more deeply into the technology infrastructure optimization market but lack the breadth of solutions.”