CA to acquire Arcot Systems for SaaS identity management

CA said Arcot's software as a service delivery model could help accelerate its delivery of CA identity and access management technologies from the cloud.

CA Technologies announced plans to acquire Arcot Systems Inc. in a $200 million deal that CA said could help it

provide cloud-based identity and access management (IAM) technologies.

Islandia, New York-based CA said the move would bolster its cloud security strategy. Arcot, based in Sunnyvale, Calif., offers both on premise and a Software as a Service model for its IAM software. The company provides multi-factor authentication to weed out fraudulent Web-based credit card purchases. It also provides authentication for banks and VPN authentication for enterprises.

The acquisition is subject to regulatory approvals and is expected to close by the end of CA Technologies second fiscal quarter, ending Sept. 30.

CA competes head-on with IBM, Microsoft, Novell, RSA and Sun Microsystems in the IAM market. The company has had a longstanding partnership with Arcot to offer CA customers web access management capabilities. Other vendors in the market that offer Web-based services include Entrust Inc.and TriCipher Inc.

Dave Hansen, general manager for the security business at CA Technologies said the acquisition extends CA's IAM portfolio by helping enterprises secure Web-based transactions. Hansen said CA's strategy is to provide IAM software that supports cloud applications and services and enable authentication and identity management from the cloud.

"Arcot brings to CA Technologies a strong business in fraud prevention and unique capabilities in advanced authentication using a software-only approach," Hansen said in a statement.

Hansen said CA intends to grow Arcot's eCommerce transaction business as well as improving sales to managed service providers that serve fledgling businesses. There is also synergy between the two companies, with both firms having similar customers in the financial industry. Companies can combine software from Arcot with IAM technologies from CA, Hansen said.

"Identity is a critical area for security whether you're talking about in-house or the cloud, and with 120 million identities verified by our solutions today, we bring a strong, solid recurring revenue base as well as sources of new growth opportunities for CA Technologies," Ram Varadarajan, president and CEO, Arcot Systems, said in a statement.

~Robert Westervelt

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