Nimsoft CEO Exits; CA Technologies Makes Mid-market Changes

Chris Omalley

Updated, 9:12 a.m. ET, April 5: Some sources suggest CA plans to more closely align Nimsoft with CA’s data management businesses — such as CA ARCserve. The ARCserve backup and disaster recovery platform originally was a client-server design, but CA has updated ARCserve to offer service provider licensing and cloud-oriented options that leverage Microsoft Windows Azure. ARCserve is also available via the Ingram Micro Cloud.

It sounds like CA’s goal is to empower managed service providers and cloud services providers with a broader portfolio of software solutions — Nimsoft, ARCserve, AppLogic and so on. As part of that effort, sources suggest, CA will more closely coordinate its sales teams.

The CA-Nimsoft Story

CA acquired Nimsoft for $350 million in cash roughly two years ago to accelerate a mid-market and emerging enterprise software push. Many of Nimsoft’s customers are managed services providers (MSPs) in the mid-market. Nimsoft originally offered on-premises software, but gradually introduced cloud-based equivalents plus IT service management and help desk software.

Over the past two years, Nimsoft has operated essentially as an independent division of CA Technologies. The idea was to keep Nimsoft nimble even as the division began to leverage some CA resources.

Succeeding Nimsoft’s Founder

By early- to mid-2011, CA began making its first changes within Nimsoft. O’Malley succeeded Gary Read (Nimsoft’s founder) as Nimsoft CEO in April 2011. O’Malley is a 24-year CA Technologies veteran. He joined CA in 1988 and has held key sales, executive and leadership positions. By 2009 O’Malley was focused on cloud computing. And I believe O’Malley was part of the core CA team that originally targeted and evaluated Nimsoft for possible acquisition.

So what does the future hold for Nimsoft? Sources say the organization has grown swiftly under CA’s ownership — but CA wants to grow the business even faster by creating synergies between the Nimsoft team and CA’s various mid-market data management efforts.

Targeted Job Cuts

Plus, there are signs that the broader CA is trimming costs. For instance, Long Island Business News today reported that CA is cutting roughly 50 employees from its Long Island offices — though it sounds like CA will introduce similar positions worldwide over the next year. Long Island had been CA’s headquarters and remains a major hub for the company, while most executive offices are now housed in New York City.

CA in January 2012 announced strong quarterly earnings that proved recent acquisitions have been paying dividends. But CA has been paying big premiums for its M&A activity. The Nimsoft buyout, I believe, was roughly 10X Nimsoft’s revenues — triggering very high objectives and expectations within CA for future growth.

Fast forward to the present, and CA needs Nimsoft to keep on growing amid the current reorganization.

CA Technologies was not available for comment.