Management software company Intelliden last week said it has acquired competitor Gold Wire Technology in a deal that will result in products that marry configuration and compliance management.

Industry watchers say the combined company, in turn, might make an attractive acquisition target for a larger vendor.

"All major management vendors have made prominent moves to focus on configuration and change management, [as with] HP's Novadigm and Consera acquisitions and BMC's Marimba buy," says Glenn O'Donnell, program director at Meta Group. "There remains lots of room for additional [merger and acquisition] activity."

Privately held Intelliden, which describes itself as cash-flow-positive but reveals little else about its financials, declined to say how much it paid for Gold Wire, a Waltham, Mass., company that started in 1997 and has about 20 employees.

However, Intelliden did give some insight into how its products will be blended with Gold Wire's and promised a more detailed road map in 60 days.

"Gold Wire's technologies will round out three of our four product pillars," says Dale Hecht, Intelliden's president and CEO.

He says the company's auditing engine will benefit from Gold Wire network compliance capabilities; its configuration and access management products will take advantage of Gold Wire's single sign-on features; and that the two companies also will integrate their security products into Intelliden's R-Series products. Intelliden also sells provisioning software.

Gold Wire's appliance-based packaging of its software also gives Intelliden customers an alternative to Intelliden's software offerings, Hecht says.

Intelliden, based in Colorado Springs, says it has 25 customers, while Gold Wire has 15.

The combined company's competitors include Alterpoint, Rendition Networks and Voyence in what is seen by industry watchers as a growth market, given that research shows more than 60% of network and performance failures are because of configuration errors.

"Configuration management can offer instant results by automating manual tasks and reducing errors," says Dennis Drogseth, vice president at Enterprise Management Associates. "Configuration also ensures data integrity, which is at the basis of compliance."

Intelliden officials argue that adding Gold Wire's compliance management tools could give Intelliden's configuration management products an edge over competitors'. Intelliden and Gold Wire already partner with IBM and HP to supplement their product lines.