BMC buys Identify

Before I started Newmerix, I took a long time deciding what business segment to get into. I looked at a number of possibilities including SRM, real-estate management systems, charting components, packaged application management, and J2EE management. In the end, my short list was whittled down to J2EE and packaged application management. My final decision to go with packaged application mangement was made along a few dimensions. One of them, was that there was already a glut of J2EE startups out there (Wily, Sitraka, Parasoft, Altoweb, Altaworks, etc..) and I thought the market would consolidate sooner than I could build and real value or differentiation into a product of my own. Well, it looks like I was right to be concerned with the timing of everything - as the market does appear to be consolidating. Today, another major management player decided to stake a claim in the J2EE market. BMC bought Israeli Identify Software for $150MM. This is clearly a response to CA's purchase of Wily only a few months ago for $300MM. All good M&A comes in threes (the most recent example would be the Kintana-ChangePoint-Niku triple play for the ITG space), so any bets on who HP or IBM will buy?

Comments

[Niel Robertson]

Jason Wood has put me to shame with a much more in depth analysis of the purchase. Check it out here:

http://woodrow.typepad.com/the_ponderings_of_woodrow/2006/03/bmc_can_identif.html

[Jason Wood]

Niel,

Great to hear your thoughts on this...I've got a blog post coming later on this acquisition. There are a lot of interesting aspects to it IMHO.

As to the "next" to fall...Mercury bought Performant, does that count?

I've been saying for some time that HP is going to step up the M&A game; maybe they make a play for Mercury (a bold move to be sure) or someone like Quest, or if they want to play it smaller for now, perhaps Sofea?