SolarWinds Looks to Shine in Other Markets

By Brenon Daly

Having built a billion-dollar market cap through a cheap and easy offering for network management, SolarWinds (SWI) is looking to take that approach to new markets through small acquisitions. Exactly a year ago, the company picked up Tek-Tools to add storage management to its portfolio, and now it steps fully into application performance management (APM) with its reach for Hyper9. SolarWinds is handing over $23m in cash for Hyper9, with terms also providing for a possible $7m earnout.

The addition of the small Austin, Texas-based startup, which had only about $2m in sales, gives SolarWinds its first stand-alone APM offering. (In the past, SolarWinds had a much less robust APM offering as a module to its flagship Orion product.) It also brings the company into more direct competition with management giants such as Hewlett-Packard (HPQ), CA Technologies (CA) and Quest Software (QSFT), among others.

In terms of competition, we would note with some irony that in a recent technology bakeoff that a nationwide grocery chain held for a monitoring product, Hyper9 got the nod ahead of SolarWinds, among other vendors. (See the full details in our User Deployment Report; subscription required). So maybe part of the thinking at SolarWinds for the deal was, if you can’t beat them, buy them.

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An insider’s view on tech M&A transactions and trends, Inorganic Growth covers the numbers as well as the story behind them. Brenon Daly is the primary writer, with insights from across 451 Research. Hundreds of more in-depth M&A analysis reports and data can be found in 451 Research's subscriber-only Market Insight Serivce. Our M&A numbers come from The 451 M&A KnowledgeBase — a proprietary database of all tech deals since Jan. 1, 2002, sorted into more than 650 industry categories. The KnowledgeBase includes proprietary data on deal values and/or trailing revenues for key private M&A transactions. To request more information about our M&A research services, please go to the following URL: https://www.the451group.com/apply/apply.php?apply_page_id=604 Visit The 451 Group: Inorganic Growth (https://blogs.the451group.com/techdeals/)

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