Nimsoft Session at Cloud Expo

CA is buying privately held Nimsoft Inc for $350 million in cash, another bet in the cloud. The deal should close by the end of the month and Nimsoft would remain a standalone business unit under current management reporting to Chris O'Malley, head of CA's cloud products and solutions business line.

CA will use money it has on hand but overseas to pay for the property.

The deal follows its recent acquisitions of Cassatt, NetQoS and Oblicore and its pending acquisition of 3Tera. All are basically cloud-directed and meant to bring the old mainframer into the 21^st century.

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Nimsoft has previously identified CA along with IBM, HP, BMC, EMC and a bunch of smaller firms as competitors.

It has cross-platform Unified Monitoring solutions for virtualized datacenters, hosted and managed services, cloud platforms and SaaS resources and its months-old architecture is supposed to eliminate the need to deploy any other solution.

The start-up claims about 800 customers, including both mid-market and global organizations such as Amway, Barclays Capital, the European Medicines Agency (EMEA) and Ladbrokes, as well as cloud and managed service providers such as 1&1, CDW, Hitachi and Rackspace.

CA said Nimsoft's business has been growing revenue year-on-year in the double digits since 2004 and that it booked $54 million last year, up 32%. It was also cash flow positive in each of its four quarters last year and should remain so though the acquisition will be dilutive for CA by 10 cents a share until 2012 when it should break even.

Nimsoft, which runs its R&D out of Norway, where it began, was originally established as Nimbus Software in 1998 and renamed Nimsoft in 2004.

CA is interested in Nimsoft's MSP business, now 300 customers strong, as well as so-called "emerging enterprises." It means to localize Nimsoft's widgetry for a thrust into the BRIC countries, where it expects cloud computing and hosted/managed services to play a central role in business development.

CA estimates that emerging enterprises, which it categorizes as organizations with annual revenues from $300 million to $2 billion, will account for approximately a quarter of the software spending in CA's market space by 2013. With Nimsoft's market expertise and technology, it expects to add an entirely new set of customers to its base of historically large enterprises.

Nimsoft gives MSPs visibility into the performance and availability of their customers' business applications across both internal and external IT infrastructures and its automated implementation can accelerate their time-to-value.

It has monitoring and reporting solutions for public cloud and on-demand offerings like Google Apps for Business, the Rackspace Cloud, Amazon Web Services and EC2 and Salesforce.com, as well as internal applications, databases and physical and virtual server environments

Nimsoft CEO Gary Read said things were moving so fast in his market that he wasn't sure the company could scale on its own.

Nimsoft will remain a subscription service, CA said.

CA said it expects to retain most of Nimsoft's 120 people.

Nimsoft raised only $22.3 million in two rounds, beginning in '07, from JMI Equity, Scandinavia-based Northzone Ventures and Goldman Sachs.