NetManage Picks Up Wall Data

Is there still a market for terminal-based PC-to-host connectivity solutions in the age of the Internet? NetManage Inc. ( certainly hopes that there is, especially after the PC connectivity specialist moved in late October to acquire PC terminal emulation software specialist Wall Data Inc. (

The companies signed a definitive agreement for NetManage to buy Wall Data for about $94 million. NetManage is offering to acquire all of Wall Data’s outstanding shares at $9 per share.

Wall Data is best known for its Rumba brand of PC-to-host connectivity solutions, which are deployed primarily as terminal front ends for Unix and IBM-based AS/400 and System 390 mainframe computers. NetManage provides connectivity solutions for other hosts and platforms, as well.

The client-to-host connectivity space has suffered of late as more organizations opt to put Web browser front ends on host-based applications. These applications were traditionally accessed through a classic dumb terminal or through a PC equipped with terminal emulation software -- such as that produced by Wall Data.

"[In past surveys] IT decision-makers indicated that they planned to put Web-based front ends on these important applications rather than continuing to use terminal emulation software," says Dan Kusnetzky, director of worldwide operating environments at International Data Corp. (IDC, "This means that these end-user organizations are planning to update their middleware -- transaction processing monitors, etc. -- to use the versions which support browser-based clients."

During much of 1999 Wall Data was besieged by a series of financial setbacks stemming from the shrinking demand for solutions in the client-to-host connectivity market segment. In August, for example, the company divested itself of a 10 percent holding in XML developer DataChannel ( to raise money.

Four days before the proposed acquisition by NetManage, Wall Data founder and CEO John Wall resigned. On the same day, the company announced an anticipated operating loss of between $11.5 million and $12.5 million for the first quarter of 2000.

NetManage, for its part, is recasting itself as a purveyor of e-business solutions. In March 1999, for example, NetManage unveiled its eN2000 strategy, an initiative to offer solutions for server-based connectivity, Web-to-host, and application integration server implementations. Consequently, company sources expect the combination of NetManage and Wall Data to heavily leverage technologies from both parts to assist enterprises that want to transition to e-business solutions.

NetManage also indicated that the combined entity will continue to provide client-to-host connectivity solutions such as those traditionally supplied by its constituent parts. In addition, sources say, NetManage hopes to increase its presence in the burgeoning Web-to-host connectivity market.

Zvi Alon, NetManage’s president and CEO, says his company’s acquisition of Wall Data was prompted by a desire to increase its presence in the explosive market for e-business solutions. "With the acquisition of Wall Data, we are continuing to further our strategy of market leadership while increasing our presence in the new and growing e-commerce and e-business markets," Alon comments. "This move will strengthen the position that we established as the first single source supplier of advanced PC and Web-based connectivity solutions."

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