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Information Technology major CA Technologies (CA) recently entered into an agreement with iTRACKS Corporation to develop new solutions aimed at the Enterprise Infrastructure space.

The collaboration is expected to help transform Data Center Infrastructure Management (DCIM) of different service providers. The collaboration is expected to help companies offer solutions to help customers address the current DCIM limitations and better manage data center power, space and cooling, with complete awareness of the complex interdependencies and processes underlying the enterprise infrastructure.

The companies are expected to jointly develop and integrate enterprise IT management with physical infrastructure management for "single pane" management of a customer's DCIM ecosystem. This mainly includes IT infrastructure, facilities infrastructure, building management systems, and IT systems and processes. The final solution will be developed combining CA ecoSoftware and iTRACS Converged Physical Infrastructure Management (CPIM).

The jointly developed solution will likely help data center owners and operators to improve capacity and performance. Moreover, this will also improve availability, reduce energy consumption and costs, adapt efficiently and utilize cloud technologies to serve the organization's business requirements.

CA Technologies has been collaborating for the development of new technologies and solutions. It is also forming joint ventures to develop new products. Recently, Bull and CA entered into a joint venture to take their cloud computing business to the next level. The company has also formed strategic alliances to help large enterprises transform their heterogeneous IT infrastructures to private clouds.

The alliance is specifically aimed at providing synergies with respect to several technologies, including a distribution agreement covering CA Technologies’ Virtualization Management and Service Automation solution portfolio: CA Automation Suite for Data Centers. So joint ventures have emerged as a new strategy adopted by CA to develop new offerings.

The company witnessed year-over-year revenue improvement during the second quarter. However, product demand trend was moderate in the reported quarter. Keeping in mind the quarter’s revenue backlog, we believe the company provided conservative fiscal 2012 guidance.

We also believe that CA Technologies’ endeavor to return value to share holders through share buybacks and dividend increases will boost investor sentiment. On the other hand, we are apprehensive about intense competition in the software & cloud computing space from big players, such asInternationalBusiness Machines (IBM) and Hewlett-Packard Company (HPQ). In addition, its high debt balance and European exposure may pose some challenges going forward.

The company has a Zacks #4 Rank, implying a Hold recommendation in the short term.

 
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