Compuware readies spin-off of Covisint

Systems software supplier spins off cloud collaboration business as it plans to go private.

Compuware has confirmed its plan to spin-off of enterprise collaboration company Covisint.

Covisint was initially established by car manufacturers including General Motors and Ford as a business-to-business marketplace but now targets broader enterprise collaboration including healthcare and oil and gas. Compuware said that after the spin-off it will no longer own any interest in Covisint.

Covisint CEO Sam Inman said the company will continue to focus on building its cloud platform: "Providing our customers a single point of entry to connect with their business partners and customers to ensure trusted information gets to the right people and place at the right time."

This is just one part of the change in strategy at Compuware, currently going private as part of a $2.5bn deal which will see it bought by venture capital group Thoma Bravo. Compuware has been one of the leading players in the mainframe business for many years

Going private often allows a company to make major changes without having the added stress of doing it in with Wall Street watching. It's a significant move but if it can be done successfully, the long term benefits can make it worthwhile.

That is what Thoma Bravo is hoping and right now there is something of a fashion for tech companies going private, as Michael Dell has done exactly the same thing with his company, and Tibco is doing likewise.

For Compuware, the once core Compuware mainframe business - test data management - has remained but it has been declining in importance for some years. As that has happened Compuware has been looking into newer fields of development. Not that Compuware is moving away from the mainframe anytime soon - the company recently re-affirmed its commitment to the z/OS mainframe operating system; analysts Gartner recently named Compuware's dynaTrace (which has just been renamed as Dynatrace) as one of the application performance management (APM) software leaders.

In 2004 Compuware bought Covisant and Gomez, an APM tool for close to $300m.

ZDNet recently spoke to John Van Siclen, the general manager of Dynatrace who said to company has spent close to $550m to modernise and become the leader in application performance management. Siclen's Dynatrace is a "$350m business within Compware and the market leader". They have done that by "taking leadership away from CA, Cisco and HP/Mercury", claims Siclen.

Now the plan is to take the separate parts of what was Compuware and turn them into separate companies that will be responsible for their own future. What lies ahead now with the move back into private ownership, "outside the 90 day scrutiny of Wall Street", says Siclen, is this "allows us to be much more flexible and nimble". And again, as Siclen sees it, the emerging Compuware the APM player is now in "a very exciting, very competitive and very fast moving" place. "It's the place to be," he says.

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