NT-Focused Network Management Companies Merge

Joining the ranks of companies like Entevo Corp. and BindView, Mission Critical Software Inc.(www.missioncritical.com) and NetIQ Corp, (www.netiq.com) announced a merger. In addition, the companies announced the acquisition of a smaller performance management company, Ganymede Software, Inc. (www.ganymede.com).

The two companies agreed to an equal merger, with each company’s stockholders receiving about half of the combined company. The new company will be worth about $2.7 billion.

Michael S. Bennett, Mission Critical’s chairman and CEO, will hold the title of executive chairman, while Ching-Fa Hwang, president and CEO of NetIQ, will be CEO of the new company.

While Mission Critical and NetIQ, both offer products in the network management space, they are not in direct competition. Their products are aimed at managers of Windows NT networks, but cater to different needs. "We plan to leverage our combined intellectual property," Hwang says.

In addition, the companies will combine a sales force, allowing them to share customers and extend the reach of both product lines. Bennett feels the new company will benefit from each other’s customers, saying, "There is so much overlap between customers who have to deal with two vendors."

Ray Paquet, an analyst at GartnerGroup (www.gartnergroup.com) agrees, pointing out that while some of the companies’ products are similar, Mission Critical derives most of its revenue from its directory and user administration tools, while NetIQ focuses on performance monitoring software. "Overlap is what is planned and not what is," Paquet says.

Ganymede, a private company, will be purchased by Mission Critical and combined into the new company. Ganymede produces performance management solutions, which will further extend the companies’ vision of a comprehensive network management suite.

Unlike Hewlett-Packard Co., Tivoli Systems Inc., and other vendors working with heterogeneous systems, the new company will offer products primarily for Windows NT and Windows 2000. "We are clearly focused on NT, where the significant growth is," Bennett says.

Like Entevo, Mission Critical is one of many companies offering migration tools for Windows 2000. Asked if the current spate of mergers was a result of the Windows 2000 release, Paquet replied, "Windows 2000 is showing a lot of opportunity."

The merger should be completed by June.