Quest Software Buys PassGo for Access and Identity Management

Published: December 12, 2007

by Timothy Prickett Morgan

Quest Software, a maker of tools for managing Exchange and Active Directory implementations on Windows platforms, said last week that it has inked a deal to buy PassGo Technologies, a privately held British company that specializes access control and identity management products.

PassGo was founded in 1983, and was eventually acquired by a company called Axent, which was in turn acquired by PC security juggernaut Symantec, which has recently became a big-time data center player through its acquisition of file system maker Veritas. Anyway, in August 2001, the people behind the original PassGo company did a management buyout and became an independent firm again, selling a variety of authentication and single sign-on products for Unix, i5/OS, and mainframe platforms as well as for the Web layers of applications. PassGo got its start on mainframe platforms and expanded out from there as the IT market has evolved.

"As our customers face the challenge of providing appropriate user access and better controlling what users can do when they have it, their IT departments are looking for solutions to help them better manage access and authorization," explained Vinny Smith, Quest Software's chief executive officer in a statement explaining the deal. "Over the past couple years, Quest has increased its focused on expanding our Active Directory-based identity management strategy to non-Windows systems, and the addition of PassGo is the next step in our effort to meet customer needs in areas like security and compliance."

The financial details of the PassGo acquisition were not divulged, but the company did say that it expected the deal to close in early 2008. John Rainford, who was chief executive officer at PassGo and who was formerly the vice president of engineering at Symantec, is now vice president of PassGo products at Quest Software and reports to Steve Dickson, vice president and general manager of Quest's Windows business unit.

The PassGo acquisition follows fast on the feet of Quest Software's acquisition of Provision Networks, which was bought for an undisclosed sum on November 12. Provision's Virtual Access Suite is a tool that allows the remote deployment of virtualized PCs and servers based on VMware virtual machine partitions. And back in June, Quest Software forked over $77.4 million to buy ScriptLogic, which makes security auditing and patch management tools for Windows networks.

Quest Software has been investigating its stock option pricing practices to look for backdating issues, and has not filed its quarterly or annual financial reports since the June 2006 quarter ended. It has, however, filed preliminary financial results, and in the third quarter ended in September, Quest Software reported sales of $153.4 million, up 12 percent, and said that it had $366.1 million in cash and equivalents on hand. It can do lots more acquisitions with that war chest as it builds out its product set--and probably will.

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