“Microsoft’s vision is to deliver tools that can offer a holistic view of services to application architects looking to optimize their software; performance information and debugging capabilities for DevOps and ops pros; insight into KPIs for executives; and information about customer usage to product owners. Microsoft doesn’t yet have a cohesive offering for all of the above, but it has the pieces to enable it and has begun delivering on some integrations across products.”
Original source: Microsoft gets serious about monitoring
Based on the S-1 filings from the business, a $3.7B price implies a 17.3x enterprise value/trailing twelve month revenue multiple, which is 41% higher than the next nearest acquisition, Salesforce/Demandware. There’s no comparable pricing event in the M&A market in the last 10 years.
And, from Simon at The Register:
The Borg’s plucked the company mere days before it was expected to float on the stock market, an event expected to raise around US$1.4bn for a portion of the company.
While AppDynamics could point to over 2,000 customers and nine-figure revenues, it also had rather a lot of red ink to deal with. That’s Cisco’s problem now, as it will make AppDynamics a software business unit in its internet of things and applications business.
Source: The Biggest M&A Multiple in Software History
From Nancy Gohring:
In 2015, Dynatrace recorded $466.6m in revenue, including $30m from services and $60m from SIGOS, the mobile network-testing company that Keynote acquired in 2006. Dynatrace’s APM revenue was $376.6m, representing 15% growth over the previous year, and making it twice as large by revenue as two of its primary competitors – New Relic and AppDynamics.
She writes fine reports.
Source: Dynatrace tackles integration of Keynote and Ruxit
“In 2015, the worldwide application performance management software market grew an estimated 12.1% over that in 2014, in large part because of increased demand for a new generation of solutions designed to support DevOps and multicloud infrastructure initiatives,” explains Mary Johnston Turner, research vice president, Enterprise System Management Software. “This new generation of APM solutions is easier to implement, supports more sophisticated analytics, and is less expensive than earlier offerings. As a result, APM is providing value to a much wider range of developers and IT operations teams that need constant, current visibility into end-to-end application performance and end-user experience.”
The previous y/y was 12.7%, so things are going well in that market I’d say. As I recall, this includes mainframe and other “not normal” revenue. If you look at just the subset market of x86 and web apps, it’s even higher around 17%. That “distributed” APM TAM was estimated at $2.2bn in 2014.
I don’t have access to the full APM report, but the size is around several billion. One Gartner estimate put it around $2.6bn in 2014.
See also this vendor share commentary based on Gartner’s analysis of the APM market.
Source: Worldwide Application Performance Management Software Forecast, 2016–2020
Sell more APM, grow marketshare, probably over at 4-5 year term:
The APM market is fragmented. We are the only APM vendor with more than 10 percent share. We can’t reach our potential without joining forces with the channel. No APM vendor has more than 20 percent share, and we aim to change that.
If you threw in Keynote (and finessed the taxonomy), a bit of organic growth, and acquired a medium to large sized APM startup, sure! You could buy AppFog off Dell, but integrating that might be a hassle (maybe migrate customers over off Foglight?). NetIQ is also scurrying around in Thoma Bravo land, right?
I’ll have to go check the APM market-share pie-charts and start the clock ticking.
More on the Compuware go private plan, APM
My colleague Dennis Callaghan wrote up an update around CopperEgg, the APM tool purchased by Idera in July of 2013.
While you’ll have to be a 451 client to read the full report (or sign up for a free trial), here’s some excerpts:
Now under Idera, CopperEgg has added real-user monitoring and repositioned itself as an application performance management SaaS vendor.
And the 451 Take:
We’re glad to see CopperEgg running fairly independently within Idera, though we’ll be interested to see how Idera can bring some of its and Precise’s IP to bolster CopperEgg, particularly in database performance monitoring. CopperEgg is growing nicely, though at four years old, it’s not clear that it’s really faring any better than its competition in a crowded and muddled space. The company can offer a front-to-back-end performance monitoring tool, though it still can’t go too deep on the application side. Still, CopperEgg has given Idera a solid presence in SaaS-based monitoring, one that was built from the ground up for SaaS, and Idera is managing it the right way so far.
Check out more in the full report.
CopperEgg tackles APM space under Idera (451 Report)
The APM stuff is going like hot-cakes apparently. Adding to it’s developer & QA tools and monitoring (AlertSite) portfolio, SmartBear announced it’s acquisition of Lucierna. On that note, one of the analysts on my team, Dennis Callaghan, has a long report coming out on the APM as a Service market this month. I’ve, of course, read over the galleys, as it were, and it’s a good, comphrensive overview of what’s going in the APMaaS space. Keep your eyes peeled for it!
On a slightly meta-note, I’m curious to see how smallish roll-up companies like SmartBear and Copper.io fare. I think we’ll see a lot of that, and then there’s larger folks like Idera and Solarwinds seeming to operate in similar fashions. NetIQ and Quest were companies like this that got rolled into larger things, and with Dell and BMC being private, there’s plenty of froth in the systems management area: either by the giants divesting their own assets or wanting to acquire.
SmartBear adds APM capabilities with Lucierna acquisition
The Now Factory adds capabilities to analyze how consumers interact with various services on their phones, and to yield faster insights on their behavior, Big Blue said.
This piece from Joab Jackaon makes to sound like it’s a good approach for doing telco/mobile vertical focused analytics, which would fit with IBM’s vertical approach.
According to Caroline Chappell, Heavy Reading analyst and Service Provider IT (SPIT) expert, TNF goes beyond traffic and packets to actually give mobile operators visibility into how mobile apps are performing on the networks. So, for example, an operator could determine what kind of experience Facebook users on a particular cell are getting. It’s this kind of end-user visibility and control over the customer experience that’s needed in an end-to-end CEM solution, Chappell says.
Sounds like IBM bought a mobile APM company