Stable Mercury targets new acquisitions

Confidence boost spurs firm into acquisitions

IT governance and testing specialist Mercury is experiencing minimal customer reaction to its recent delisting from the Nasdaq stock exchange and is poised to close another software acquisition in the near future.

That is according to Mercury's newly appointed UK managing director James Stevenson who said he was aware of just one UK customer who had requested further information on how the vendor planned to regain its listing and restate results affected by last year's revelation of a stock option fraud at the company.

"I had expected some questions, but it really has been amazingly quiet," he said. "I can only assume our customers have seen it for what it is: which is a non-operational issue."

Thomas Mendel of analyst Forrester agreed the impact had been "very limited" . "Mercury's customer satisfaction ratings have remained high," he added.

Stevenson also claimed that with the acquisition of service oriented architecture (SOA) management specialist Systinet completed earlier this month Mercury is considering a further acquisition in the "near term".

Stevenson would not be drawn on the precise nature of the target, revealing only that it would flesh out the vendor's business technology optimisation (BTO) strategy to provide a portfolio of IT testing, management and governance tools that help firms optimise the business outcome of their IT infrastructure.

Another SOA management specialist represents the most likely target according to Mendel. Companies in this area include Actional, AmberPoint, Infravio and SOA Software.

"Systinet is more of a service repository player and doesn't offer full management of transactions within composite apps," he said. "In light of CA's acquisition of Wily, Mercury will be looking in this area."

Failing that Mercury could also look to plug gaps in its configuration management database or process mapping capabilities, Mendel added.

Stevenson also predicted Mercury would see growing customer demand this year for its BTO portfolio, particularly in the area of application management. "We are seeing the trend in the US and there are signs it is moving to the UK," he added.

The pressure on IT departments to deliver applications to end users based on pre-agreed performance and availability service levels means firms require application management tools that give them awareness over the end user experience, Stevenson argued.

He added that Mercury's BTO strategy addresses this problem and claimed the vendor will also bolster its portfolio during the second quarter with the launch of new tools designed to provide real time monitoring over ends users' application experience it acquired from BeatBox last September.

However, Stevenson admitted the company still faced challenges in articulating what it means by BTO and reaching the right purchasing decision makers within organisations. "We traditionally talk to application developers and [with BTO] we now need to talk to more IT operations managers, so one of the aims this year will be to create relationships with new people within our existing customers," he said.