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NETSCOUT Systems to Acquire Quantiva

February 14, 2005
Combination Will Add Advanced Analytics to Industry's Richest Network and Application Performance Management Platform

WESTFORD, Mass., Feb 14, 2005 /PRNewswire-FirstCall via COMTEX/ -- NetScout Systems, Inc. (Nasdaq: NTCT), a leading provider of enterprise-wide network and application performance management products and solutions, today announced that it has entered into a definitive agreement to acquire the business and assets of privately held Quantiva Inc., a provider of automated analytics solutions for application performance management, for approximately $9 million in cash, subject to closing adjustments. The acquisition will extend NetScout's unified network and application performance management solution by automating the process of detecting and diagnosing performance problems before they significantly impact IT end users.

Quantiva's patent-pending technology uses real time performance metrics collected from third party instrumentation (now to include NetScout's nGenius System) to establish statistically expected behavior values using advanced modeling and analytics. When a measurement such as the response time of a critical business application or jitter in a voice call is recognized as being outside of the expected range, Quantiva's software automatically performs further analysis to determine the likely cause.

Quantiva's founder, Ron Hiller, was ideally qualified to address this challenge, having studied anomaly detection in depth at Bell Labs and having secured the services of Princeton University statisticians to refine and adapt his leading-edge statistical techniques. The resulting solution is dynamic and self-learning, eliminating the need to manually set thresholds, a typically tedious and error-prone process. It also spots potential problems earlier than other methods by detecting performance anomalies rather than depending on external alarms. The final outcome is fewer, more reliable alarms, accompanied by actionable diagnostic results, allowing IT staff to be more productive and more effective in maintaining high business service levels.

"NetScout customers have been asking for more effective ways to leverage our rich performance data to directly improve service performance. Their goal is to detect potential problems before they impact application end users," said Anil Singhal, president and CEO of NetScout Systems. "Combining our superior data set with Quantiva's data-driven anomaly detection and Progressive Analytics(TM) technology, we can shorten both the time to detect problems and the time to fix them. Although other vendors are trying to solve this problem, their results are limited by a lack of access to highly granular flow-based performance data spanning the network, the servers, and the applications."

"NetScout has completed the task of consolidating performance data from many sources in complex environments through our CDM technology," continued Mr. Singhal. "Our next step is to help our users put this data set to use in the business-focused, proactive management of their mission-critical network and application services. We consider automating performance management as a key step toward the autonomic application delivery infrastructure that the IT industry is now defining."

"With this move, NetScout is directly addressing key challenges we have seen our clients encounter," said John Morency, principal, Transitional Data Systems, a consulting firm that works closely with enterprises to help them set strategies to optimize IT effectiveness. "By automating performance analysis, NetScout is answering the pervasive need for minimizing MTTR (mean time to repair) in the face of dramatically increasing complexity within today's converging networks all while keeping costs under control. The combination of Quantiva's progressive analytics with NetScout's high granularity flow data represents a real opportunity to drive up the ROI on NetScout's solution as well as the underlying infrastructure."

The acquisition, subject to customary closing conditions, is expected to close early in NetScout's first quarter of fiscal 2006. Quantiva employees will become NetScout employees, and Quantiva's New Jersey office will become a NetScout center for analytics development and expertise.

Conference Call and Webcast:

NetScout Systems will host a conference call today at 8:30 a.m. ET, which will be webcast live through the Company's website at http://www.netscout.com/investors . Alternatively, people can listen to the call by dialing 800-230-1951 for U.S./Canada and 612-332-0636 for international callers. A replay of the call and the webcast will be available after 10:15 a.m. ET on February 14 for one week. The number for the replay is 800-475-6701 for U.S./Canada and 320-365-3844 for international callers. The access code is 770521.

About Quantiva

Quantiva is the leading provider of automated analytics for application performance management. Based in Princeton, New Jersey, Quantiva is a private firm backed by leading venture capital firms, including Castile Ventures and DFJ Gotham. Further information is available at http://www.quantiva.com .

About NetScout Systems, Inc.

NetScout Systems, Inc. (Nasdaq: NTCT) is a market leader and pioneer of integrated network and application performance management products and solutions that unify performance across the enterprise. NetScout's nGenius Performance Management System is helping more than 3000 leading companies increase their return on infrastructure investments by optimizing the performance of networks and applications according to business priorities. NetScout is headquartered in Westford, Massachusetts and has offices worldwide. Further information is available at http://www.netscout.com .

2004 NetScout Systems, Inc. All rights reserved. NetScout and the NetScout logo, and nGenius are registered trademarks of NetScout Systems, Inc. The CDM logo, and MasterCare and the MasterCare logo, are trademarks of NetScout Systems, Inc. Other brands, product names and trademarks are property of their respective owners. NetScout reserves the right, at its sole discretion, to make changes at any time in its technical information and specifications, and service and support programs.

Safe Harbor:

Forward-looking statements in this release are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. Investors are cautioned that statements in this press release, which are not strictly historical statements, including statements concerning the expected closing and effects of the acquisition, expected synergies and product offerings resulting from the acquisition and the plans, objectives and future financial performance of NetScout, constitute forward-looking statements which involve risks and uncertainties. Actual results could differ materially from the forward-looking statements. Risks and uncertainties which could cause actual results to differ include, without limitation, risks and uncertainties associated with the Company's ability to close the acquisition in a timely fashion and integrate the acquisition successfully, costs associated with the acquisition, the ability to achieve market introduction and acceptance of new products from the acquisition, difficulties in managing geographically dispersed operations, and other factors relating to acquisitions generally, as well as the Company's relationships with strategic partners, dependence upon broad-based acceptance of the Company's network performance management solutions, the Company's ability to achieve and maintain a high rate of growth, introduction and market acceptance of new products and product enhancements such as the delivery of nGenius product platform probes and software solutions and the implementation of the Company's CDM Technology strategy, the ability of the Company to take advantage of service provider opportunities, competitive pricing pressures, reliance on sole source suppliers, successful expansion and management of direct and indirect distribution channels and dependence on proprietary technology, as well as risks associated with a continued climate of tight IT spending, and risks of further slowdowns or downturns in economic conditions generally and in the market for network performance management solutions specifically. For a more detailed description of the risk factors associated with the Company, please refer to the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2004 and its quarterly report on Form 10-Q for the quarter ended December 31, 2004 on file with the Securities and Exchange Commission. NetScout assumes no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.

SOURCE NetScout Systems, Inc.

Peggy Flynn of NetScout Systems, +1-978-614-4162, or flynnp@netscout.com; or Dawn
Sullivan of Schwartz Communications, +1-781-684-0770, or netscout@schwartz-pr.com
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