Microsoft Acquires Opalis

Microsoft and Opalis

Today Microsoft Corporation (NASD:MSFT) announced a definitive agreement to acquire Opalis Inc., the leading independent vendor of IT Process Automation (ITPA) software.

IT Process Automation (ITPA) is a Data Center Automation (DCA) discipline that EMA defines as “the ability to automate and integrate the workflow of complex, multi-discipline IT management processes.” This automation can replace many manual, resource-intensive, and error-prone activities that typically cross multiple IT components, disciplines, and/or departments. ITPA delivers exceptional results including freeing up 77% more staff for strategic projects, providing more than 60 additional hours of system availability per year, and saving an average $500,000 more per year on staff costs than other Data Center Automation (DCA) disciplines.

This space has been gaining interest, both expanding and consolidating, for some time, as evidenced by significant development and acquisition activity from Novell (ZENworks, PlateSpin), HP (Opsware, iConclude), BMC Software (RealOps, Atrium), NetIQ (Aegis), Symantec (T-Logic, Altiris), and CA (Optinuity, Spectrum).

I think this is an excellent move by Microsoft. It will certainly make customers of both companies very happy. Microsoft and its customers gain an exceptional solution, in a discipline area that Microsoft was clearly lacking, and one which delivers many proven and exceptional benefits. For Opalis customers, it is probably a mixed bag. It will be a major change, but with Microsoft’s strength and stability, it is likely to be a positive outcome overall for Opalis customers.

This is, however, a huge blow for competitors, especially for the few large management vendors that have not yet acquired or built an ITPA solution or components, or whose own ITPA capabilities are less than stellar. For other large mgmt vendors with credible or better ITPA capabilities, this is both an opportunity and a threat. For mid-sized vendors that compete with Opalis or Microsoft Systems Center, and especially smaller vendors, this is a horrible result. Overall, most vendors will have to hustle to respond, although many will be unable to do so.

Meanwhile, Microsoft, Opalis, and their customers should be ecstatic with this deal. Few acquisitions are so clearly positive for the stakeholders as this.

You should be able to check out what the executives from both companies have to say in their blog posts:

• Blog post from Brad Anderson, Microsoft Corporate Vice President: http://blogs.technet.com/systemcenter/default.aspx
• Blog post from Todd DeLaughter, President & CEO of Opalis Software: http://www.opalis.com/blog.asp?id=1

Meanwhile, I will be expanding on the impact of this acquisition very soon with a full EMA Impact Brief. Keep your eyes out for that one – lots of significant implications for customer and competitors, without doubt!