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Computer Associates International Inc. (CA) announced it has acquired e-mail archiving startup iLumin Software Services Inc. for an undisclosed amount. The storage management software maker said it plans to integrate its new subsidiary's messaging capabilities into a new multi-application compliance product by mid-2006.
Founded in 1996, iLumin's Assentor software provides e-mail archiving, records management and electronic discovery for compliance. The Reston, Va.-based company announced it had expanded Assentor to manage unstructured file systems data earlier this month.
"E-mail has just become so darn crucial in the last couple of years," according to Arun Taneja, founder and analyst with the Taneja Group. "It's so important that companies are saying partnerships aren't enough -- they have to own the whole [company]."
Broderick said CA considered several iLumin competitors, but declined to give their names. CA jumped on iLumin because of its product's scalability -- iLumin counts several of the country's largest financial institutions among its customers -- and its ability to work across many messaging platforms, including Exchange, Lotus Notes and GroupWise, the company said.
"It's a unique angle," said Brian Babineau, analyst with Enterprise Strategy Group. "Many companies will buy someone who does what they already do just for the installed-customer base." CA said it would keep iLumin a separate, autonomous business unit within CA's storage division and would not be making personnel changes to the company, at least not right away.
"We're looking at it as an investment business," Broderick said. iLumin's 250-plus customers are almost exclusively based in North America, and Broderick said bringing iLumin's business to a worldwide level would be step one following the acquisition.
"We're going to be boosting their R & D [research and development] to get rid of the localization of the technology," Broderick said. "We're going to help them make it available in different languages."
An embattled companyIf CA seems to be following the herd with this acquisition, they are. EMC Corp. has offered e-mail archiving through Legato Systems Inc. since 2003, Hewlett-Packard Co. has offered it as part of its Reference Information Storage System since May 2004 and Veritas Software Corp. acquired a similar startup, KVault Software Ltd., in Sept. 2004 just before it was itself acquired by Symantec Corp.
CA, on the other hand, has been embroiled in an investigation by the Securities and Exchange Commision (SEC) beginning in early 2004 for improprieties in its accounting practices in 2000 and 2001, when it was under different management. CA only settled the case with the SEC in Sept. 2004; new CEO John Swainson still has yet to reach his one-year anniversary with the company.
Meanwhile, the company has struggled both in terms of mind and market share. According to a Diogenes Labs customer satisfaction survey published in Storage magazine Sept. 7, "Computer Associates International Inc.'s (CA) products didn't fare particularly well… in the enterprise product group, five of the eight products rated above 5.0…only Syncsort Inc.'s Backup Express and CA's BrightStor Enterprise Backup rated below a 4.5."
"Now that they have their ducks in a row, they've started to look at the market again," Babineau said. "You have to plug the holes in the ship before you start turning it."