In a move to broaden its offerings for the growing network intelligence and diagnostics market, telecom equipment manufacturer Net Optics recently announced the acquisition of network analytics software provider nMetric.
Net Optics acquired nMetric through its purchase of sister company Triplelayer, an Australian distributor. And although Net Optics CEO Bob Shaw sees Triplelayer's positive standing in the Australian, New Zealand and Southeast Asian markets as an advantage to Net Optics' growth, the network monitoring tools are what he believes will have the largest impact for customers.
Shaw cited customers' rising security and bandwidth concerns as main reasons for the acquisition. He says enterprise customers had grown concerned about threats lurking on network access points that were going unused.
"Where we saw a gap is in many cases there were customers that would have the Net Optics product and they wouldn't have enough budget to have it plugged into every location where they had one of our access products, and yet they were concerned that they needed to have a health check and visibility to check all of those areas they weren't plugged into," Shaw says.
By acquiring nMetric and incorporating network monitoring and analytics tools into its products, Net Optics is targeting a market for which many in the industry have forecasted rapid growth. According to an IDC report published earlier this month, overall spending on network equipment is set to grow 8.7% this year, up from just 3.8% in 2011. As a result, IDC's report predicted "network intelligence becomes strategic" in 2012 as IT managers will devote larger portions of their budgets to network performance and security.
Cindy Borovick, research vice president for IDC's Enterprise Communications and Datacenter Network services, predicted acquisitions like this as a result of growing customer demand for network intelligence solutions. Several emerging trends, which Borovick believes will gain momentum in 2012, have put higher value on network intelligence tools and made those that provide them more valuable as acquisition targets.
"When you think about the strategic importance of the enterprise network and the connectivity out to customers, partners, taking advantage of cloud services, or even just using your own internally owned data centres to create an active-active network or an overall disaster recovery strategy, there's a real focus on that WAN architecture," Borovick says. "And we believe the combination of network intelligence and WAN expertise is really going to start to change. We'll start to see some vendor changes and acquisitions."
Other analysts have seen similar trends driving increases in network investments. Daniel Kennedy, research director for information security at TheInfoPro, says the ability to peer into the network and gather analytics is essential for IT managers either preparing for future spending on network equipment or analysing the impact of expenses already made.
"Obviously there is a clear delineation between determining where network bottlenecks are as a business case to justify WAN optimisation expenditures, as well as to measure how any implemented solutions are working," Kennedy says.
According to Shaw, the market for these tools will be where Net Optics will reap what it has sown in the nMetric acquisition, which he believes was a quick move to get in on a market that may not go underserved for much longer.
"There's a real gap in that there's nobody that's providing this for remote branch sites," Shaw says. "So if you look at how diverse organisations are spread out, it's a new market that nobody is selling products into."