Quest plans to acquire Aelita for $115M

Quest Software has agreed to acquire Aelita Software for $115 million. Both companies make products that manage Windows server software.

The market for Windows manageability tools got a little smaller this week, with Quest Software Inc. agreeing to acquire Aelita Software Corp. for $115 million.

The combined forces of Quest, which along with NetIQ Corp. leads the market in Windows server management software, and Aelita, is a natural for a few reasons, said Thomas Mendel, an analyst at Forrester Research, Cambridge, Mass.

First, IT administrators are looking to buy from fewer partners, not more. Many customers are turning to the big four vendors, which include IBM, Hewlett-Packard Co., BMC Software Inc. and Computer Associates International Inc.

"Smaller vendors, such as Quest, NetIQ, Aelita, Bindview [Corp.] and NetPro [Computing Inc.], need to broaden their portfolios," Mendel said.

Dublin, Ohio-based Aelita, which produces manageability tools for Microsoft Exchange and Active Directory, has attractive products but cannot stand on its own in the market for much longer, Mendel said. And Quest, of Irvine, Calif., needs to expand its product line to compete against NetIQ, he said.

Quest executives said that they will combine the two companies' tool offerings. However, Mendel said that, as is usual, it is likely that some of the products will go away during the course of product integration. Mendel advises Aelita and Quest customers to keep in close contact with the two companies to track the life cycles of the products they use.

Aelita had a bundling partnership with Hewlett-Packard, which apparently hasn't panned out as much as was hoped, Mendel said. He said that Quest and Aelita combined would own about one quarter of market for Active Directory manageability tools.

This is the second acquisition by a Windows manageability tools vendor in as many months. In December, systems management software vendor Altiris Inc. paid $43 million to acquire Wise Solutions Inc., a software packaging tools manufacturer.

FOR MORE INFORMATION:

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Article: New AD tool brings users 'back from the dead'

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