Network-Management Tools Are Poised For A Comeback

Demand for network-management software peaked about the same time the Internet Protocol became standard for business networks. Now the software is poised for a renaissance, sporting new capabilities and new owners.

IBM, which earns more revenue from network-management software than any other IT vendor, in late December acquired one of the four other market leaders, Micromuse, which specializes in technologies that dig into networks to search out problems. A week earlier, Cisco Systems introduced its Network Application Performance Analysis suite, designed with extensive network-management capabilities, such as predicting the performance impact of new applications on networks and identifying trends in configuration problems.

Pure-play network-management vendors such as Network General Corp. and Network Instruments LLC have been around for years, but recent moves by the big technology vendors highlight the potential for another growth spurt for the software. Driving its growth are the convergence of data, voice, and video on IP networks, and the hooking into networks of more types of devices, such as PDAs and cell phones. And as companies buy into the Web-services concept, applications that have a Web front will demand attention from the network. The global network-management market will grow from $1.94 billion in 2005 to $2.45 billion in 2009, IDC predicts.

All this means increasing complexity for network managers, who now need new capabilities from their network-management tools. The explosive growth in network usage, for example, has created a false-positive problem. In a recent survey of 195 companies by networking vendor Netuitive Inc., 41% say they receive more than 100 alerts a day about network problems, and at least half of those are false-positives. Newer capabilities in management tools from Netuitive and Network General can automatically set acceptable network and traffic functionality levels during a heavy use period, so that warnings aren't issued just because of a usage spike. Products from Network General and Cisco include easy-to-use dashboards that provide high-level visibility and the ability to drill into packets and pinpoint the whys and wherefores of network problems.

As businesses look to cut IT costs and the number of vendors with which they work, it creates opportunities for the big technology companies to expand into new areas or offer more types of products within their second-tier product categories. "We are seeing increased propensity, particularly on the part of large enterprises, for integrated tools," Gartner analyst Will Cappelli says. "They have experienced what it's like to integrate best-of-breed products, and that has proved to be costly."IBM paid $865 million in cash for Micromuse and plans to incorporate the company's offerings into its IBM Tivoli line. It chose Micromuse for its expertise in helping banks, telecommunications carriers, retailers, and other businesses manage VoIP, audio, and video services over the Internet. Publicly held Micromuse closed its fiscal year in September with revenue of $160.8 million, an increase of 10% from the previous year.

CA bought Concord Communications in April and folded Concord's extensive network- and network-services-management capabilities into its own flagship enterprise product, Unicenter. "The network is a key foundation that touches all the other IT silos," says Trent Waterhouse, CA's VP of strategy for enterprise systems management. "Without the network, you don't have application servers talking to Web servers."

For smaller pure-play network-management companies, these shifts could mean boon or bust. "There will always be room for [tools] that do specialized, periodic, detailed investigations of packets," Cappelli says. But if the larger vendors keep expanding into that territory, it will become difficult for the pure-play vendors to prove they can offer something that's unique.