Thursday, February 17, 2011

Quest Software and recent acquisitions

I noticed on Jackson Shaw’s blog that identity management is big over at Quest these days with recent acquisitions and more to come. Interesting. Let me take you down a path and then pose a question.

Back in 2004/2005 Oracle took an honest look at their identity management stack and realized that customers really did want a one stop shop (if it was possible). Sure it is a lofty goal to have every identity management tool, but they did look at their gaps of standard identity management tools such as Single Sign On and User Management (Oblix) , Provisioning/De-Provisioning (Thor), Virtual Directory (Octet String) and filled them via these acquisitions. There was a little overlap in the products, but actually very little.

Sure Oracle could have gone out an developed them from scratch, but that would have taken many physical years (and a ton of "man" years) to get to the features and functionality (and stability) of these products that already had a solid customer base and were good, mature products. Buying the technology (and the people who built it) and re-tooling it for their purposes was the path they chose. I know most of these products have now had “Oracalized” versions released with greater integrations between them.

So the question asked looking backwards is: Did Oracle make the right choice? Well I think the obvious answer is a resounding YES. I’ll give two reasons. One, look at the stock price from 2005 to now. Sure Oracle has made other acquisitions, etc. but overall they have performed very well and Wall Street has agreed. If I compare Oracle stock to say Microsoft’s over this period I believe it is a yes as well.

Two, look at market share specifically in identity management. Oracle leap frogged ahead of the competition and took a resounding lead. Analyst firms clearly put them out in front.

So now my question today is: Is Quest the new Oracle in identity management? And if they are, who are they going to take the business away from? Oracle, IBM, CA, Microsoft? Obviously we here at Optimal IdM partner heavily with Microsoft. Forefront Identity Manager (FIM) is selling well and we fill their virtual directory gap they have with our Virtual Identity Server (VIS) solution. While we aren’t Microsoft, our products are built with their technology and leverages & extends the existing investment that a customer has already made.

So what is Quest’s strategy on identity management and who do you think has the most business to lose?

BTW – I do believe that is truly a “lose” scenario. Sure, the identity management market gets bigger each year, but how much bigger? Not that much in a relative sense. Someone at a major un-named vendor told me once that they don’t have any way to track how much business they lose. When you look at it this way, it is really easy. It is simply the sum of revenues of your direct competitors. If a customer purchases Oracle's IdM solution over Microsoft's, well Microsoft lost that deal (even if they weren't aware of it).

Come on folks, it’s not like we are talking rocket science, or developing a virtual directory, which is trickier than you might think!

4 comments:

  1. Interesting question Mike. Quest has a foot in the door at a ton of companies due to the strength of their platform migration tools. ...many of whom don't have traditional IAM solutions in place. Because of that market position, they're probably in a unique position to generate some demand amongst that client base who might not otherwise be looking for IAM. It will be interesting to watch as the market continues to evolve.

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  2. Good post Mike. I agree that Oracle has made very smart acquisitions and has done a great job in “Oraclizing” the products. However, with regards to Quest's strategy in its purchase of Voelker Informatik's Active Entry product, I think you will find it will turn out to be a colossal mistake. Not only is its concept of an internet shopping paradigm for IDM truly confusing, but it was built on an open source .Net alternative, Mono, which is most likely going to be back-shelved by Attachmate with their acquisition of Novell and the firing of the entire Mono team. I don’t see this product gaining much of a foot-hold in the IAM space even with the captive audience that Quest has (http://thedotnetfactory.wordpress.com/).

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  3. Thanks for your support of TEC!!!

    Phil - We could debate an "internet shopping paradigm" but we'll let the market decide that one. Your point that our product "was built on an open source .Net alternative" is incorrect however.

    Mono is about enabling .Net applications to run cross-platform - http://en.wikipedia.org/wiki/Mono_(software). Our product has been built using .Net and it runs on Windows like any other product designed to work on the Windows platform. The fact that our product runs on Mono means Mono is a) "working as designed" from the perspective of Mono; and b) enables customers who really want to run our product on a different platform to do that thanks to Mono - not Quest (or Voelcker).

    If Mono were cancelled it would limit customer choice in many different products and not just Quest's. The impact would be far broader. That said, you've probably seen the news that Mono is not dead - http://www.xamarin.com/ - so this is really not an issue either way (IMHO).

    Thanks for reading and again thanks for your support of Quest's TEC conference!

    ...Jackson Shaw (jackson.shaw(at)quest.com)
    Sr. Director, IAM Product Management

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