Micro Focus Moves NetManage Acquisition Forward

July 22, 2008 Alex Woodie

Now that the dust has settled following Micro Focus International‘s sudden acquisition of NetManage this spring, teams with the two software companies have had a chance to evaluate their respective products and develop a roadmap for how the products will evolve in the midterm. Meanwhile, the acquisition has reshaped the former NetManage company, with some developers getting re-assigned, other workers being let go, and the closing of NetManage’s former headquarters in Silicon Valley.

In early May, Micro Focus surprised the midrange when it announced plans to buy NetManage for $73.3 million. In rationalizing the acquisition, Micro Focus CEO Stephen Kelly said the addition of NetManage’s application modernization tools would strengthen Micro Focus’ existing product line. Boards with both of the publicly traded companies approved the deal, no resistance to the deal was expressed, and the acquisition was made a done deal on June 18.

Since then, the two companies have been working to integrate NetManage’s products, employees, and customers into Micro Focus’ organization. Micro Focus, which is based near London, has completed a string of acquisitions lately. As with anything, the more you do it, the better you become at it, and this experience appears to be playing a role in how quickly NetManage has been integrated into Micro Focus.

According to product managers with each side, the companies have evaluated the NetManage tools and determined where they best fit. Mostly, this involves letting the NetManage products continue along their previous development paths. This is true of RUMBA, the popular desktop emulation tool that boasts 30 million licenses sold down through the years. RUMBA’s roadmap appears to change little post Micro Focus.

That is not the case for OnWeb, NetManage’s flagship green-screen application modernization tool for mainframes and i OS environments. Plans call for eventually integrating OnWeb with EnterpriseLink, Micro Focus’ solution for encapsulating logic in mainframe applications and exposing them as Java or Microsoft COM services that can be more easily accessed over the Web. “Effectively what we’re looking to do is take the product we have called E-Link and combine that with some of the functionality available around OnWeb,” says Tim Cheadle, director of product management and product solutions for Micro Focus. “It’s a ‘best of both’ strategy.”

The first step in that integration will be on display with a new release of OnWeb later this year, says Archie Roboostoff, the former NetManage director of product management who now holds the title of product manager for EIT, or Enterprise Integration Technology, the internal Micro Focus name for the NetManage group. Specifically, OnWeb will get two things from E-Link, including new high availability features and new programming features.

“One of the big complaints from the OnWeb customer base was in terms of performance and failover redundancy,” says Roboostoff, who is at Micro Focus headquarters in England this week to go over product and company strategy. “There are some portions of EnterpriseLink that have very sophisticated clustering capabilities, very sophisticated failover technology that we look to inherit into the OnWeb product line and proliferate to existing OnWeb customers who have really been waiting for something like this.”

The other new element has to do with detecting legacy screen changes with OnWeb. “OnWeb could encapsulate a number of legacy screens and bundle that into one Web service that can be consumed by many methods,” Roboostoff says. “If that screen changes or if somebody makes a landscape change to it from the mainframe side, that whole Web service can break and cause an administrative nightmare.”

As with the clustering, E-Link already has something in place that can be retrofitted for OnWeb to solve the problems surrounding legacy screen changes. That makes Roboostoff’s job easier. “It’s almost as if the stars aligned when this acquisition came into play, because the long term vision of OnWeb was something that Micro Focus had in place already.”

So, what does E-Link get out of this technology partnership? “E-Link gets a slightly better interface,” Cheadle says. “It’s a good news story all around.”

A new release of RUMBA is also in the works, but the acquisition by Micro Focus doesn’t appear to have shifted the product’s roadmap much. The new RUMBA release will be certified for Windows Vista (the previous release achieved the lower “works with” rating), and native FIPS validation, which will help RUMBA sales in government agencies and private companies working on government contracts.

In terms of long-term strategy, Micro Focus is still mum on the exact form any collaboration will take. There is a potential to support additional languages beyond the company’s strong suit–COBOL–with Revolve, an IT analysis tool that provides a “bird’s eye” view of an organization’s IT assets. Supporting RPG–the dominant development language in the System i world–with Revolve is a possibility, although such a move is not a certainty. “Obviously you want to protect and serve” your customers, Cheadle says.

Cheadle did say that several NetManage development “stars” have been invited to work on Micro Focus’ future products team, which is scoping out a cloud computing initiative and new deployment models. He also mentioned the former Librados B2B connectors that NetManage sold (which are now classified as part of the OnWeb product), and mentioned some new ISV initiatives. Taken together, it appears that Micro Focus could be working on a new business plan that harnesses its application modernization and integration solutions into a cloud-based offering.

In terms of NetManage’s employees, most of them have been offered jobs at Micro Focus. Nearly all of the development and “go to market” (or sales and marketing) teams have been retained. Most of the headcount reduction has occurred in the back-office and administrative parts of NetManage, although the company has not disclosed the exact number. NetManage’s former corporate headquarters in Cupertino, California, have been closed, and the retained employees instead are working out of the Micro Focus office in nearby Mountain View. NetManage’s developers, who are based in Haifa, Israel, continue to telecommute.

NetManage’s customers will benefit from the acquisition, according to Cheadle. “Certainly there’s the piece of mind of a company that has a very secure financial backdrop,” he says. (Micro Focus had $228 million in revenues for the most recent year.) “We’re reinvesting in development, and putting some new products in front of customers, and particularly in the ISV market. Obviously, you want to protect and serve [your customers]. We’re offering a good story to them.”