Earlier this year, one of the better known names in Windows software management and migration disappeared, when Aelita was taken over by its rival Quest Software. The two have spent the ensuing months figuring out how to combine their assets, says Ratmir Timashev, Aelita's president and CEO who has since re-emerged as general manager of Quest's newly formed Windows management group.
"Quest was strong on diagnostics and reports, Aelita in recovery and audit - we were surprised how much synergy there was," he says. "We have created five suites, the only major overlap was in migration products - but those are tactical tools, not three to five year commitments.
"The other overlap was Active Directory administration, with Quest Active Roles versus Aelita Enterprise Directory Management. The Quest product was two-tier, Aelita's was three tier, so we kept both, and the choice depends on the customer - two tier for easy deployment, three if you want management workflow and integration."
Migration is what set the two companies on a collision course. Both were targeting the needs of companies adopting Microsoft's Active Directory or moving from older versions of Windows or Exchange to newer releases, Aelita through its own tools and Quest via its acquisition during 2000 of FastLane Technologies.
It poses challenges that cover both business and technical issues, with a great deal of learning to be done. And it is becoming harder to avoid - there is still much truth in the saying that 'If it ain't broke, don't fix it,' but Microsoft's revenues still come from new product and upgrade sales, so it forces users to upgrade by withdrawing support.
"It's a big year for Microsoft. It's already under pressure from Linux and there's lots of users still on NT and still authenticating through NT, and still using Exchange 5.5," Timashev says. "It means Microsoft can't sell them new applications and that's where Microsoft's business is."
And that means supportiing migration is still a good business, even though Microsoft now includes basic migration technology with its applications - technology which in some cases was developed for it by Quest. Timashev argues that the bundled utilities are OK for mid-sized companies, but not for everyone.
"There are a lot of dependencies in Windows and a lot of issues in migration. It is a 12 to 18 month process for a large company - most companies underestimate both the time and the risk," he says. And of course once we have adopted Active Directory and migrated to Exchange 2003, that all needs to be managed. The issue for Microsoft is that its revenue comes from elsewhere.
"There's no long term revenue for Microsoft in Active Directory management tools," Timashev argues. "Their concern is to build more features into the next release, add antivirus, improve performance, and so on. They have not been good at understanding Exchange or Active Directory management because they don't make any money from it.
The acquisition of Aelita, which turned over around $30 million, has created a $100 million Windows software group within Quest, and although it's no longer his own company Timashev is clearly pleased to have charge of a much larger group than before.
"We have 400 people in R&D now, more than all our competitors combined," he says, adding that the next task is to provide continuity for existing customers. He says Quest will support existing products for 18 months and provide free replacements where one tool is replacing another.
He contends too that although there has been considerable consolidation, for example with Aelita and its competitors FastLane and Mission Critical all being acquired (the latter by NetIQ), the market for Windows system management has not matured yet.
"UNIX and mainframe management are mature, so there's two or three big vendors and not much growth," he says. "There's probably still 20 to 30 small vendors in our market, all under $5 million or $10 million."
But what of the biggest competitor of them all? Timashev claims to be cautious but not fearful: "Anybody in the software business competes with Microsoft," he says. "The key to success is to stay two steps ahead, stay close to the customer, fix Active Directory problems before Microsoft does, and be more heterogeneous than Microsoft - for example, our audit product also collects from UNIX and Linux.
"It is in Microsoft's interest to have companies like Quest around to help customers move to Active Directory. Overall, Microsoft gradually reduces the need for our products, but it also creates more opportunities for us."