Wednesday, May 6, 2009

Compuware refocuses: optimization, performance, portfolio management in -- Quality out

This guest post comes courtesy of David A. Kelly at Upside Research, where he’s principle analyst. You can reach him here.

Well, okay, maybe that headline is misleading, but the details aren’t.

Detroit-based software giant Compuware isn’t really dropping the quality of its products, but it is selling off its Quality Solutions product line to help refocus its business on areas where it can compete most effectively.

On Wednesday Compuware announced an agreement that Micro Focus would acquire Compuware’s Quality Solutions line, including the products themselves as well as the 330 people in the development, sales, and customer-support teams. The deal is valued at $80 million and expected to close this quarter.

MicroFocus is also buying Borland Software for $67 million, placing Micro Focus more powerfully in the applications quality and lifecycle management arena. [Disclosure: Borland is a sponsor of BriefingsDirect podcasts.]

Compuware has never been a company that moves fast — but for them, and their customers, that’s been a good thing. For years, Compuware has been a reliable, steady and practical IT partner for governments, mainframe-oriented IT shops, and large organizations.

But this announcement, which Compuware portrays as another step in its “Compuware 2.0 evolution,” is expected to allow Compuware to invest resources and energy in what it sees as high-opportunity markets, from application performance and mainframe optimization to IT portfolio management and healthcare collaboration.

Perhaps another way to read this is that while Obama’s stimulus package has the potential to jack up the need for new technologies, modernization of healthcare and other government IT environments, it doesn’t necessarily mean that companies will be spending significantly more on code testing or development tools.

With Micro Focus acquiring Borland the emphasis goes deeply to application lifecycle management (ALM). Of course, more recently, Borland had spun off its traditional developer tools group into CodeGear (sold last year to Embarcadero Technologies), and had refocused on Open ALM, or ALM 2.0.

Incidentally, Former Borland CEO Todd Nielsen is now a poobah at VMware.

Micro Focus hopes that by acquiring complementary technologies from Borland and Compuware that it will be able to create a market-leading position in the application testing/automated software quality market. Such a position would work well to broaden Micro Focus’s leadership in the application management and modernization business.

And although this move makes some sense from Compuware’s perspective, don’t kid yourself that quality or good old testing is dead—it isn’t. And even though the next five years will no doubt see a big inflection point between traditional, workstation-oriented development products and processes and cloud-based ones, there are still plenty of applications and organizations that can benefit from solid application quality solutions.

Longer term, however, the real winner that market will be the company (perhaps Micro Focus?) that’s able to deliver forward-looking (i.e., cloud-oriented) technologies that span these IT needs and deliver practical solutions to increasing software and application quality.

This guest post comes courtesy of David A. Kelly at Upside Research, where he’s principle analyst. You can reach him here.

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