CA Xtrackers California Municipal Bonds ETF

CA Inc. (CA) recently signed a multi-year licensing agreement with privately held Bird Hosting Inc. Financial details of the agreement were not disclosed.

Web-hosting solutions provider Bird Hosting has been using CA Inc.’s 3Tera Applogic platform since 2009. According to a company official, the transition by to the 3Tera AppLogic platform enabled Bird Hosting to reduce its data centre footprint by 64% and consolidate 200 servers to just 10 in a single data centre. Moreover, the company has satisfied customers with increased connectivity.

Under the terms of agreement, Bird Hosting will extend its monthly arrangement with CA, tripling the number of servers running the software. With this extended arrangement, Bird Hosting will be able to serve more customers through a single grid environment.

In March 2010, CA completed the acquisition of cloud-computing pioneer 3Tera Inc. The company’s flagship AppLogic offering helps customers to easily build up cloud services and deploy complex applications to public and private cloud environments. Bird Hosting was one of 3Tera’s customers.

We remain encouraged by the long-running business tie-up between the two companies. Moreover, we think that CA’s emerging opportunity in the virtualization/cloud computing space is significant and could help accelerate growth over the next 2–3 years.

CA is doing well in most of its business segments. We believe that with macroeconomic and IT spending recoveries, the company should be able to deliver decent numbers in the upcoming quarters.

However, we are a bit concerned about intense competition in the software and cloud computing space from big players, such as International Business Machines Corp. (IBM) and Hewlett-Packard Company (HPQ).

Currently, CA holds a Zacks #3 Rank, implying a short-term Hold rating.

 
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