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Update: Quest Buys Aelita

Quest Software Buys Aelita Quest Software Inc. will buy privately-held Aelita Software for $115 million in a deal announced by the companies late Wednesday. The deal, a combination of two of the companies with the deepest sets of Active Directory and Windows-specific migration and management technologies, is expected to close this quarter.

With the acquisition, Quest Software adds to an already large product set that includes more than 70 products in three main categories -- database management, application performance management and Microsoft infrastructure. The existing Quest products for Microsoft infrastructure handle Windows/Active Directory management, Exchange management, migration and file server consolidation.

Aelita specialized in migration and management tools for Windows, Exchange and Active Directory. The company also offered backup and restore products, event log consolidation and server consolidation among other tools in its portfolio of 17 products.

At a strategic level, Quest chairman and CEO Vinny Smith said the acquisition better positions Quest in the business for Microsoft infrastructure software. "The Microsoft Windows infrastructure is truly the 'front-line' for today's business," Smith said in a statement.

Quest officials expect that, by the end of the year, the Aelita acquisition will help the Microsoft business grow to about a third of Quest's revenues and position the business unit for further growth in that segment. Aelita has 400 employees and about 3,000 customers. Darren Mar-Elia, Quest's CTO for Microsoft Infrastructure Management Solutions, says Quest's Microsoft business unit is currently similar in size.

Ratmir Timashev, who is president and CEO of Aelita and will run the Quest Microsoft product business, explained the fit this way in a statement: "Aelita's expertise in key areas, including migration and backup and recovery, combined with Quest's prowess in performance management, troubleshooting and Active Directory management will unite in a very natural way to deliver a comprehensive and powerful set of solutions for customers looking to improve the productivity, system availability and security of their Microsoft enterprises."

The move represents the absorption by Quest now of two of the four early movers in the original Windows 2000/Active Directory migration market, which has been utterly transformed since its origin in the late 1990s. Quest first acquired FastLane in 2000 and now is absorbing Aelita.

Officials from both companies say that while their product sets appear to overlap in many areas, a closer inspection shows they are complementary.

"Aelita shines in supporting a lot of different Exchange migration scenarios. We were slow to get into that market," Mar-Elia said in providing a direct example. Aelita vice president of marketing Aggie Haslup pointed to the companies' Active Directory management products as examples of similar categories with different features and customer types. "The Quest product is different and is sold to a different kind of structure as opposed to the Aelita product," she said.

Mar-Elia and Haslup both expect product integration discussions to take about a quarter to resolve after the acquisition closes.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.