Three successful network management acquisitions

It used to be that when an enterprise management vendor made an acquisition the talk would be how it would go wrong, which more often than not, would be the case. The acquiring company thought it would get a product, a market and a competitive edge without thought to technology integration, culture, and the human decency towards the creative and dedicated population that made the acquisition target worthwhile. While never having been a victim of this myself, at least so far – knock on wood, I’ve watched this happen from the acquiring side on multiple occasions.

Since everyone, and especially analysts, are fond of describing cycles, I would say the cycle from the acquired companies’ employees’ perspective is something like this: initial euphoria, followed by a period of unanswered questions, followed by a period of making do with uncertainty, followed by a period when questions are answered in unfortunate ways (we’ll call this “They Can’t Mean it!”). This in turn is followed by – not to mince words – a period we’ll call “purge.”

However, in the last several years, acquiring companies in the network/systems management market are beginning to realize that, to actually achieve competitive advantage, it’s important to make an effective technology integration work so that the whole is more than the sum of its parts. And to do this it makes sense to nurture, not abuse, the creative fabric behind the solution you’re acquiring. This is one of those not actually so rare cases where decency and good business practice go hand-in-hand.

I’m going to point out three positive examples over the past three years: NetScout’s acquisition of Quantiva, NetQoS purchase of RedPoint, and Network General’s acquisition of Fidelia.

While none of these made the headlines as some of the recent and conspicuous acquisitions have, they all deserve attention as positive moves clustered within a specific and critical market where application-flows over the networked infrastructure are monitored for performance and optimization. They are among the quintessential examples of approaching the network as “an instrumented ocean for service delivery.”

NetScout announced its acquisition of Quantiva for advanced analytics on Valentine’s Day – Feb. 14, 2005, and completed the acquisition two months later. EMA had long tracked both companies – NetScout for its richness of data collection and strengths in visualization, and Quantiva for its focus on analytics in application performance. The union of the two was and remains a striking example of the combination of critical functional synergies to offer capabilities far beyond the obvious. The Quantiva acquisition also brings NetScout a strong link to application performance management, which presents Quantiva with potential for partnerships and new markets over time.

NetQoS completed its acquisition of RedPoint Network Systems in the spring of 2005. The acquisition involved integrating only a handful of employees but gave NetQoS critical SNMP polling technologies, as reflected in its NetVoyant product. NetVoyant’s ship date (April 26, 2005) coincided with the closing of the acquisition, and brought in device-related historical statistics that complemented NetQoS’s existing strengths in flow-based optimization and performance troubleshooting. NetQoS has since acquired Pine Mountain Group for technology consulting and has demonstrated significant industry growth based on a combination of pragmatism and breadth of functionality.

Network General acquired Fidelia Technologies on Feb. 6, 2006 and is just now shipping the fruits of the initial integration. Although still small in dollars and employee size, this is the largest of the three acquisitions and Network General has made the most explicit effort to realign and reposition itself in the market through this acquisition.

Once again, EMA had been following both companies closely and viewed Fidelia as a technology leader in integrated fault and performance management with strong capabilities for service level management and even business service management. Moreover, Fidelia’s “NetVigil” was designed to succeed in mid-tier and smaller businesses. But Fidelia, with its 20 employees, lacked the critical mass for its technology leadership, so it’s a good complement for Net General’s much larger sales engine. Fidelia is using Network General’s capabilities to combine event management with packet and flow-based traffic monitoring, and in-depth capabilities for application and systems management. Fidelia’s container modeling functions will also provide Network General with the potential for business service management and creating optimized solutions for specific environments, such as VoIP.

The lesson to be learned from all three acquisitions is that modest acquisitions can bring huge benefits when combined with commitment and appropriate technology focus. It’s amazing how little real intelligence was brought to bear on some of the acquisitions I witnessed from the inside out in my past lives. It was almost as if the notion of the cartoon was more important to business planners than the real multi-dimensional image behind it. NetScout, NetQoS and Network General have happily gone far beyond this form of bravado-based management and, though competitors, are likely to differentiate in ways that are compelling and meaningful to the future of the markets they serve.