Concord solidifies net management suite with fault management technology.
Concord Communications is hoping to win over customers who are looking to reduce the number of vendors they have to deal with to manage their enterprise networks, systems and applications.
Concord announced last week it would acquire competitor Aprisma Management Technologies in a $93 million deal set to close in the first quarter. Concord says by incorporating Aprisma’s fault management technology into its performance management software, the company will be able to provide customers with a more complete management product from one vendor.
“Consolidation in the management market is inevitable. Customers want to deal with fewer vendors, and we realized adding Aprisma would help us provide to them best-of-breed performance and fault management capabilities,” says Jack Blaeser, Concord president and CEO.
The companies plan later this year to integrate Concord’s network, systems and application performance management and reporting software (eHealth Suite) with Aprisma’s Spectrum infrastructure and IT service assurance software. The combination could help Concord win accounts from competitors Lucent, InfoVista, Micromuse, Quallaby and Smarts (set for acquisition by storage giant EMC), and start competing against BMC Software, Computer Associates, HP and IBM, Blaeser says.
Kim Jahnz, lead WAN data network engineer at Aurora Health Care in Milwaukee, already integrates Concord and Aprisma products. Jahnz has been a customer of both companies for years, and she says the vendors’ plans to integrate make sense. She uses Aprisma’s Spectrum for infrastructure management and root-cause analysis, coupled with Concord’s eHealth performance reporting and Application Response software, to manage application performance from the end-user desktop to back-end systems.
“Spectrum to me is the expert in network fault management, and Concord has the best reporting and application response monitoring tools. I just finished our very manual integration project to bring the products together,” Jahnz says. “Going forward, I’d like to see reports using infrastructure topologies overlaid with application topologies. It would be great to have all them do that integration work for me.”
Yet Jahnz, who also uses software from Intellitactics and Attention Software, doesn’t expect to whittle her vendor accounts down to just one anytime soon.
“It’s easier to deal with fewer vendors, but if you get down to just one, they can get you over a barrel and that’s when they stop delivering,” she says. “Healthy competition keeps vendors responding to customer service and support problems.”
Customers such as Scott Bracken, an IT specialist with aircraft parts manufacturer Goodrich, in Chula Vista, Calif., wants to see product integration from Concord’s 2003 netViz acquisition before he considers Aprisma’s capabilities.
“I’d like to see them get that part working in the coming months,” Bracken says. He uses Concord to track business service performance when it goes awry, and says he believes the netViz technology will enhance Concord’s current offering. “I’d like to be able to have a geographic map run over the IT map so when a problem occurs it is simple to narrow it down to a specific place, such as California.”
While addressing customer concerns might have motivated the vendors to merge, other factors played an obvious role.
“Right now the price is simply right for technology,” says Rich Ptak, a principal analyst with Ptak, Noel & Associates. “Now is the time for vendors to beef up their portfolios, but they need to keep in mind that merging is a challenge beyond product integration.”
For Concord, Blaeser says Aprisma represented a complementary acquisition. The company embraced the same culture, the same sales mentality and the same technology goals as Concord and is located in Portsmouth, N.H., north of Concord’s Marlborough, Mass., headquarters.
Aside from similarities between the companies, Concord’s motivation for the deal seems simple: It wants to expand its customer base and increase its revenue quickly. Concord, which expects to pull in about $110 million in revenue for 2004, will next year be able to add Aprisma’s revenue to its balance sheet. Aprisma estimates its 2004 revenue was about $43 million. The deal also will add about 1,000 Aprisma customers to Concord’s installed base of 3,000.
“We can double our dollars as one company,” he says.
For Aprisma’s part, the network management arm of the now-defunct Cabletron needed an environment in which to grow its technology. Since mid-2002, Aprisma has been owned by Gores Technology Group, which purchased the company from fellow Cabletron offspring Enterasys. Industry watchers speculated if Aprisma could distance itself from Enterasys’ U.S. Security and Exchange Commission investigations it could become a solid management software maker on its own. Under Gores, Aprisma re-established itself as one of many network and systems management software makers, competing in a market IDC estimates to be about $13.2 billion.
“We had taken it as far as we could on our own, and it was the right time to join forces with Concord,” says Aprisma President and CEO Mike Fabiaschi.
In December, Concord announced its plans to purchase Vitel Software, a maker of products to manage legacy IP PBXs. And in July 2003, Concord announced its acquisition of netViz, a maker of software that lets users visualize business processes and lets them map relationships within the supporting technology infrastructure.
