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Network General customers face more change

NetScout's pending acquisition of Network General could cause turmoil for customers if not handled properly.

By Denise Dubie, Network World
September 20, 2007 07:51 PM ET
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Network General customers could face another upheaval as the company is set to change hands for the third time in 10 years when NetScout completes its $205 million acquisition of the Sniffer technology creator.

The acquisition, expected to close in November, would combine Network General's expertise in managing networks, applications and servers from the bottom up with NetScout's top-down approach to real-time network and application-performance monitoring and management, NetScout officials say. Industry watchers agree the acquisition could give customers more comprehensive network and application performance management capabilities.

"Network General's acquisition of Fidelia last February gives them the application performance story that NetScout was not covering," says Tracy Corbo, senior analyst for IDC. "These companies have found themselves more often in cooperative selling environments because each was approaching the problem differently."

NetScout and Network General intersect
The companies have coexisted, and in some cases, competed for 20 years.

1984 NetScout Systems founded.
1986 Network General founded; offers Sniffer technology.
1997 McAfee acquires Network General for $1.3 billion; changes name of combined company to Network Associates.
2004 Network Associates sells Sniffer Technologies unit to Silver Lake Partners and Texas Pacific Group for $275 million; changes company name back to McAfee. Network General reclaims its original name.
2005 NetScout acquires performance analysis vendor Quantiva for $9 million.
2006 Network General acquires application and service management software maker Fidelia for an undisclosed amount.
2007 NetScout announces intentions to acquire Network General for $205 million.
Click to see: Timeline

Network General, founded in 1986, established itself with its Sniffer packet-analysis technology and found itself pigeonholed in customers' minds. Today the vendor has more than 4,000 customers, who in the past 10 years have seen Network General acquired by McAfee, sold by Network Associates (which now is McAfee again) and now most likely picked up by NetScout. Despite customer loyalty to a technology staple such as Sniffer, industry watchers say Network General customers could become alienated without proper support from NetScout.

"My concern is over the fact that the Network General customers had to go through a previous acquisition and now must go through yet another," Corbo says. "If NetScout wants to double its revenue base, they will need to work very hard to shore up that base and provide them a very visible level of customer support to waylay any concerns they may have regarding ongoing product support and development."

NetScout officials say they intend to support all Network General products, take on all employees and maintain operations at the Network General location in San Jose, in addition to NetScout's Westford, Mass., headquarters.

"We are not going to stop any product lines. It is very important that we protect all customers on both sides and their investments in both companies' technology," says Jim Frey, NetScout's vice president of marketing. NetScout first will be working to deliver software that will allow interoperability between NetScout and Network General products. "The first step is to cover about 90% of active business by using software to get those product lines working together for customers," he says.

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