CA plans Platinum purchase
- By Margret Johnston
- Apr 04, 1999
Computer Associates International Inc. last week announced plans to purchase fellow management tools vendor Platinum Technology International Inc. for $3.5 billion in cash.
Officials of CA, which last year tried unsuccessfully to take over Computer Sciences Corp., said they approached Platinum, which was not for sale, and negotiated the deal in a week.
Federal and commercial customers will have a broader product line to choose from once the deal is final, and the two companies' sales groups will be combined, said Andrew J. Filipowski, president and chief executive officer of Platinum. Other details are to be worked out over the next two or three months, he said.
Many of Platinum's products already function with Unicenter TNG, CA's comprehensive solution for managing networks, security, program availability and other aspects of a computing environment. But overall, the companies' products overlap little, said Sanjay Kumar, CA's president and chief operating officer.
A key part of the deal is Platinum's expertise in knowledge management, data warehousing, database tools and application life-cycle management, which CA will use to complement Jasmine, CA's object-oriented database, Kumar said.
Some of the largest databases in the world are owned by the U.S. government, and there are numerous ways that integrated Platinum and CA technologies could help the managers of those databases improve services, said Yogesh Gupta, senior vice president of product strategy for CA.
The strength of Platinum's tools revolves around helping database users get more information from data and run databases more efficiently, Gupta said. Until now, CA clients have had to go to somebody else to get those kind of tools. "Given that we offer databases and connectivity, that is a very nice complement," he said.
Among the federal agencies that could benefit from the acquisition, Gupta cited the Internal Revenue Service, which is planning to use data mining to catch tax cheaters; the Customs Service, a user of CA's Datacom database to track imports; and the Defense Department, which uses databases for logistical information more vast than that of any multinational company.
CA's services organization also will be enhanced through the acquisition. Platinum's worldwide services group of about 1,000 people will be combined with CA's global professional services, which was launched about a year ago and employs about 3,000 people, Kumar said.
Analysts said the acquisition is a good move on CA's part for both its commercial and government businesses. Government information services managers will have a more powerful single source for databases, database connectivity products and tools, said Gopi Bala, director of management strategies research at the Yankee Group Inc. in Boston. "Platinum gives CA tremendous scale," Bala said.
Jonathan Eunice, an analyst and information technology adviser for Illuminata Inc., Nashua, N.H., said CA's announcement was preceded by a Wall Street bruising of Platinum's stock over the past six months. Platinum is a strong enterprise player, but it has struggled partly because it "goes in a lot of directions," he said.
"They have not been able, like CA and Oracle [Corp.] or even a BMC [Software Inc.], to step up and define their space and be a go-to company for a large number of customers," Eunice said.