CA Nets Netreon

Computer Associates International Inc. (CA) (NYSE: CA) today announced the acquisition of Netreon Inc., a small, privately held developer of software for designing SANs. CA didn't disclose the purchase price of the all-cash transaction (see CA Acquires Netreon).

The Netreon acquisition builds on CA's first serious move into SAN management software, in January, with the release of its BrightStor SAN Manager product for discovering and mapping devices in multivendor storage area networks (see CA Spans Into SANs).

Netreon's technology reduces the time required to plan, deploy, change, and document new and existing SANs, says Gary McGuire, senior VP of BrightStor solutions at CA. "It is a living, breathing document of all the pieces of technology that make up the SAN and can be modified as your environment changes," he says (see Netreon Set Free).

By year-end, CA expects Netreon's SANexec software to be fully integrated into the company's BrightStor storage management products.

Analysts say the deal is particularly interesting for a couple of reasons. First, CA rarely acquires early-stage companies. It splashed out $4 billion for Sterling Software in April 2000 and $3.5 billion for Platinum Technology in March 1999. The Netreon acquisition, compared to those dotcom-era deals, is an after-dinner mint."They generally do big cash-flow oriented deals, so this is a new face from CA and a refreshing sign for the industry," says Richard Vieira, managing director of BroadviewInternational LLC, a mergers and acquisitions advisor.

Moreover, CA officials say Netreon won't be the last tools-based software company it acquires as it develops its vision of managing storage "without boundaries."

"There are other tools we need to develop or acquire," McGuire says. He declined to elaborate.

Vieira says the Netreon deal also indicates CA is putting its revenue recognition and corporate governance problems behind it. "They've had a lot of non-operating activities, which has held them back," he says. In June 2001, Sam Wyly, along with his investment company Ranger Governance, announced that he would wage a proxy fight for control of CA's board of directors, citing poor stock performance and abuse of customers and employees. Wyly lost the battle, but CA's image suffered in the process.

The market for SAN management tools is on the rise as companies look for ways to better manage the storage they have already purchased -- generally considered to be a cheaper option than forking out for more hardware. But with such a mix of technology deployed in most companies, analysts say the tools on the market need to be more heterogeneous and to work in real time, with the ability to pinpoint potential problems before they happen (see SAN Monitoring Tools Grow Up)."This is how you really save an administrator time," says David Hill, an analyst with AberdeenGroup.

Netreon claims to have about a dozen customers using SANexec Designer, and the company says Microsoft Corp.