NetScout is about to close a massive acquisition that will be the catalyst for a new strategy and broader push into the communications networking sector.
Late last year the company, best known for its network performance management systems that are the basis for many telco service assurance deployments, announced the $2.6 billion acquisition of Danaher's communications business, including Tektronix Communications (traffic inspection, customer experience management and analytics), Arbor Networks (security systems) and parts of Fluke Networks (network troubleshooting and analytics), a business that together generates revenues of around $1.2 billion, compared with the $453.7 million that NetScout Systems Inc. (Nasdaq: NTCT) generated in its financial year to March 31 2015. (See NetScout to Buy Danaher's Comms Unit and NetScout Reports Fiscal Q4, Full Year.)
That deal, which was approved by NetScout's shareholders last week, is set to close in mid-July.
"All our customers are asking about it and we're going to do a big splash once the deal is completed," said Paolo Trevisan, director of NetScout's service provider business during a recent conversation with Light Reading. "We believe we have a lot of 'complimentarity' across the two companies. It won't be easy, of course, but we see it as very positive for our customers."
And there are a lot of customers: NetScout has about 160 communications service provider (CSP) customers while the incoming Danaher group has about 200, "and we have very little overlapping -- there are only a few instances," noted Mike Serrano, senior product marketing manager at NetScout. "Even when we are in the same customers, it's complementary -- it's different use cases. In those instances, our focus is performance monitoring while [Danaher] is troubleshooting. It's all about ensuring the customer has best of breed."
But the Danaher group is bringing a lot more than its troubleshooting tools: It has a key set of new capabilities that are totally new to NetScout.
"We're getting into a lot of new areas. RAN optimization is not a sector we have been in traditionally, Arantech [customer experience management] will be new and Arbor [network security] is a whole new area for NetScout," noted Trevisan. "Security and privacy is a massive trend -- anonymization and data scrubbing is a massive requirement. All of this is taking us beyond the probe approach -- we are moving to a stage where the game is changing and this deal is going to make us three times bigger."
But analytics is still at the heart of the strategy. "Everything is still tied to capturing useful data and making use of it," added Serrano.
In the meantime, NetScout is pushing ahead with its efforts to help CSPs deal with the challenges of becoming cloud players. "We are in a great position to help companies with their virtualization plans," said Trevisan. "There is a lot of experimentation going on out there and it's really table stakes -- the operators know they can rely on us. We are involved in huge projects in VoLTE and IMS in the US, Europe and Asia. That is a big trend." (See NetScout: Service Assurance Still a Must for Virtual Realm.)
The packet voice revolution isn't just restricted to the mobile operators, though. "Voice-over-WiFi is becoming a big deal, driven by the cable operators," Serrano said. "Though mobile operators are getting in on this too."
— Ray Le Maistre, , Editor-in-Chief, Light Reading