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Microsoft Buys jClarity to Strengthen Azure Java Capabilities

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Microsoft MSFT recently announced the acquisition of jClarity, in a bid to accelerate performance of workloads of Java applications deployed on the company’s cloud computing platform, Azure. However, the financial terms of the deal have been kept under wraps.

jClarity offers monitoring and intelligent performance analysis tools to design robust data-driven Java/ Java Virtual Machine (JVM) applications.

The buyout of jClarity is a prudent move considering its robust Java proficiency and strength in application performance monitoring (APM) tools. It is expected to aid Azure to streamline the usage of Java among enterprise clientele.

Moreover, Microsoft will support jClarity to continue to meaningfully contribute to open-source AdoptOpenJDK project and aid developers design innovative Java applications. Markedly, Microsoft has been co-funding AdoptOpenJDK project, along with other companies, since June 2018.

Notably, jClarity’s CEO (former) Martijn Verburg joins Microsoft as “Principal Engineering Group Manager (Java).”

Coming to price performance, shares of Microsoft have returned 37.8% year to date, outperforming the industry’s rally of 30.2%.

Enhancing Azure Java Functionalities Holds Promise

Microsoft is looking to capitalize on increasing Java usage in in-house offerings including Minecraft and Azure HDInsight, among others.

Moreover, notable customers including Daimler, Adobe, and Société Générale have deployed Java production workloads on Azure. In this backdrop, jClarity is expected to aid Microsoft bolster Azure adoption with customers working with Java database workloads.

Consequently, expanding Azure clientele on account of enhanced capabilities will strengthen the company’s competitive position in the cloud market against the dominant player, Amazon Web Services.

Moreover, the latest acquisition will enhance Microsoft’s presence in the broader APM market, which per Mordor Intelligence data, is projected to witness CAGR of 12% between 2019 and 2024.

Further, per Gartner, database management system market is rapidly transitioning to cloud, with 75% of databases to be shifted to or deployed on a cloud platform by 2022, over an on-premise setup.

Microsoft is well poised to make the most of the aforementioned growth prospects on its initiatives to enhance offerings with innovative software development tools. Acquisition of GitHub remains quintessential in this regard.

Wrapping Up

Microsoft is embracing the concept of open source (free software where code is written by software developers globally). Around 2016, the company started to support the Linux operating system, an open source operating system on Azure.

These initiatives are enabling the company to boost adoption of its offerings with enhanced intelligent software tools, which bodes well for the top line.
Zacks Rank & Other Key Picks

Microsoft currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader technology sector are Anixter International AXE, LogMeIn LOGM and Perficient PRFT, each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for LogMeIn, Anixter and Perficient is currently pegged at 5%, 8% and 10.75%, respectively.

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