Acquire or be acquired?

"Every company is at risk of being acquired", a senior Quest Software executive says.

SINGAPORE--Quest Software does not rule out any possibility of being acquired by large enterprise software vendors.

"Every company is at risk of being acquired. Quest is fortunate that it has a very strong financial history. Compared to other organizations in our space, we have a great valuation," said Richard Moseley, vice president of Quest for the Asia-Pacific and Japan markets.

He told ZDNet Asia that Quest's valuation of about US$1.4 billion is a drop in the ocean compared to the likes of Microsoft, Hewlett-Packard and EMC. Quest makes software that lets companies manage and enhance the performance of their applications, databases and infrastructure.

Moseley, however, pointed out that Quest has also been an acquisitive company. The question faced by software companies is whether they should build or buy software, he said.

"Most of what we've done is building (software) ourselves. But if there's a specific piece of technology that we need to acquire for whatever reason, it's sometimes cheaper and faster to buy that technology than build it ourselves," Moseley said.

That's exactly what the company did this year. Quest acquired Vintela for US$56.5 million in cash, and the acquisition allowed Quest to provide technology that enables businesses to manage, consolidate and centralize Microsoft and Unix systems in a single environment.

According to Moseley, the company's business is tied closely to the uptake of products from business software companies like Microsoft, IBM, and Oracle. To even out the effect of changing demands for different software products, Quest ensures it has a wide portfolio of management tools.

Quest's strategy is to plug the gaps in the business software vendors' management tools portfolio.

Said Moseley: "Microsoft does not have technology to migrate people from Novell (platforms), or move people from Lotus Notes to Microsoft Exchange."

Quest invests up to 25 percent of its revenues on research and development, and is now eyeing a larger piece of the Asian market. The company set up its regional office in Singapore to tap the growing surge in IT spending in Asia, Moseley said.