Why Compuware acquiring Gomez matters to the IT management software market

IT management technology makers have a long history of acquisitions and market consolidation is not uncommon, but vendors coming together also indicates trends among enterprise IT buyers such as a shift in spending habits or a need for greater management capabilities.

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For instance, the recent news that Compuware intends to acquire Gomez for $295 million not only marks a move in the application performance management (APM) market, but it also shows that IT management customers today want options when buying technology. Software-as-a-service (SaaS) is one trend that is taking hold, for instance. 

IT management software-as-a-service

While the deal isn’t a big surprise to some industry watchers and the dollars involved aren’t in the billions, Compuware and Gomez coming together reveals an interesting management software industry trend. IT management software makers now seem to understand that customers want to get the technology at lower costs with less upfront implementation requirements. Companies such as Service-now.com and Vineyard Networks based their business models on SaaS and established management software vendors such as HP and CA have also adapted their software products to also be delivered as services. Now Compuware’s Gomez acquisition enables it to grow its SaaS business to a market-leading position, according to the vendor, by combining the two companies’ services revenues.

“It’s not a market-shattering announcement,” says Jasmine Noel, principal analyst and co-founder of market research firm Ptak, Noel and Associates. “Compuware appears to be buying some customers in the SaaS application performance monitoring and testing markets and Gomez fit the bill -- probably because it was growing its customer base at a nice clip and the price was right.”

The merged company not only will validates the SaaS model for IT service management, according to Jean-Pierre Garbani, vice president and principal analyst at Forrester Research, but it also shows that APM technologies require multiple approaches and perspectives to provide a complete picture to enterprise IT managers. For instance, being able to incorporate the end-user perspective and experience with applications into the broader application management picture will be critical for vendors going forward.

“In the short term, integrating information from Gomez into an APM solution becomes a strong argument in favor of Compuware's new strategy, and providing an integration between web monitoring services and Compuware's passive monitoring and APM is a plus for Gomez customers,” Garbani writes in a Forrester Research blog post.  “Longer term, the combination of the two could lead to an SaaS end-to-end application performance management solution, something that should have a strong market appeal.”

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Denise Dubie is senior editor with Network World.