* Why NetScout’s acquisition of Quantiva has high potential
Earlier this year I wrote about the recent fever of acquisitions and partnerships across the enterprise management industry. And in those comments I talked about a move towards a more structural focus rather than merely a market focus. By “structural,” I mean a focus on architecture, design and enabling technologies – vs. simply adding, say, domain expertise in network and systems management together through two largely non-integrated portfolios. I believe this increasing focus on structure is overall extremely positive for buyers, as well as for the health of the management industry overall.
NetScout’s announced intention to acquire Quantiva for $9 million earlier this month doesn’t count as significant in terms of dollar value, but it holds potential for value far beyond purchase price. Moreover, it’s virtually a textbook example of investing along structural rather than purely market lines.
Quantiva is a New Jersey start-up with a focus on advanced analytics targeted primarily at application service performance. Quantiva began offering primarily a managed service offering and it still retains a handful of service customers. But over the last year-and-a-half, Quantiva has focused on an OEM direction to leverage its analytic engine through partnerships. To date, these include conversations with HP and IBM, and announced integrations with HP OpenView’s Transaction Analyzer (OVTA) and OpenView Internet Services (OVIS).
Quantiva has a sophisticated set of heuristics targeted at “learning” and capturing anomalies regarding application service performance. But Quantiva’s analytics can also integrate statistics about application-to-infrastructure utilization and networked infrastructure performance issues, such as are available through NetScout’s data collection and data store. Quantiva’s analytic capability is agentless and leverages XML and other standards to integrate information from third-party data sources.
NetScout, by contrast, has focused on data collection and data storage, as exemplified in its Common Data Model (CDM) architecture. And NetScout has already established itself as a leader in capturing application flow information as well as other SNMP-based information relevant to application-infrastructure performance. NetScout has evolved this with its High Definition Performance Monitoring (HPDM) initiative, which enables one-minute historical logging with peak utilization at one-second intervals.
NetScout has also focused on improving its visualization and reporting. For instance, its “Workspaces” let engineers capture and reuse visualization patterns for accessing information – such as aligning time-stamped usage and time-stamped response information.
So, one way to look at NetScout’s acquisition is as a sandwich, in which Quantiva analytics reside in between NetScout’s CDM and its reporting and visualization capabilities. Through this integration – initial products should be announced by the end of 2005 – NetScout’s network-centric customer base should anticipate more proactive problem resolution capabilities. Through Quantiva’s analytics, service degradations can be detected and diagnosed before traditional polling would capture them, and in many cases even before service consumers will notice a problem. This more proactive approach Quantiva and NetScout call “Progressive Analytics.”
Over time, NetScout will face both the challenge and the opportunity of leveraging Quantiva’s rich capabilities for application performance management, and its third-party partnerships with companies such as HP and IBM, to broaden and strengthen its position beyond traditional network buyers. Succeeding in these efforts will involve more cultural than technological challenges, and history has shown that cultural challenges are much harder to overcome. But the benefits to NetScout would also be extremely significant – far beyond what the $9 million purchase price for Quantiva might suggest.
One way or the other, the fruits of NetScout’s acquisition of Quantiva should be exciting to watch. If the technologies are merged creatively, it should bring significant value to NetScout’s customers and help to galvanize NetScout’s industry leadership in application-to-infrastructure, flow-based monitoring and diagnostics.
