Recently Network World compiled its second list of innovative start-ups focusing on management technology and challenging veteran vendors. We also checked in with last year's vendors topping our list.

Often people inquire about how such lists are compiled. A lot of tangible and intangible factors come into play, but in short we consider the technology the start-up is offering and how 'hot' the market is right now, based on interviews with financial analysis, venture capitalist and industry watchers such as IDC, Gartner or Forrester Research.

We also take into account executive management experience, funding, customers and potential competition. For instance, data center automation Centromeric made this year's list in small part because top competitors Opsware and BladeLogic had quite the year. HP recently bid $1.6 billion for Opsware in a pending deal set to close any day now. And BladeLogic filed for an IPO.

And one main factor considered is the youth of the company. Frankly I run into a lot of companies that are worth watching that don't make this annual list because they were founded more than a few years ago. Here is one such company that often comes up when I'm talking with industry analysts and customers that missed the list by a few years.

Netuitive

Founded: 2002

Headquarters: Reston, Va.

Management: Nicola Sanna, President and CEO, joined Netuitive in September 2002 and previously held executive positions at e-Security and Allen Systems Group.

Funding: $27.5 million

How did the company get its start? In academia as a self-learning algorithmic research project that evolved into management technology for real-time computing environments

What does the company offer? The company calls its self-learning performance management software. The products use technologies that are able to learn and set a baseline of normal behavior and alert on performance anomalies. Recently the company announced its software can manage performance on VMware virtual systems.

Why is it worth watching? The approach to management is able to tackle today's virtual, SOA and other less traditional environments. It doesn't require the server and agent components that were built for yesterday's environments. "The software takes a business service management approach that models everything, builds a baseline of behavior, and then monitors the environment for anomalies that would represent degrading performance," says George Hamilton, director of Yankee Group's enabling technologies enterprise group.

Denise Dubie is senior editor with Network World.