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Riverbed splashes out $1bn for application performance management firm Opnet

29 Oct 2012
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WAN optimisation firm Riverbed Technology is set to acquire Opnet Technologies, a developer of network and application performance management tools, in a deal worth $1bn.

Riverbed, best known for its Steelhead line of WAN traffic optimisation appliances, said it plans to extend its network performance management (NPM) business into the application performance management (APM) market with this acquisition.

Following the deal, which is set to close before the end of this year, Opnet will be combined with Riverbed's Cascade business unit, which already delivers network monitoring and analysis tools.

By combining Opnet's APM technology with its own, Riverbed will be able to build on its already strong position in the NPM market, the firm said, enabling it to provide customers with an integrated offering that not only monitors network and application performance, but also accelerates it.

"The addition of Opnet establishes Riverbed as the clear leader in the high-growth and converging application and network performance management markets," said Riverbed chief executive Jerry Kennelly.

Under the terms of the agreement, Riverbed will acquire all of the outstanding shares of Opnet common stock, with Opnet shareholders receiving both cash and Riverbed shares in exchange.

The deal which is subject to the usual regulations, will transform Riverbed into a billion dollar revenue company, added Kennely.

Quocirca analyst Clive Longbottom told V3 the deal made sense for Riverbed as it seeks to increase its revenues by offering more services to telecoms operators, but it could take it some time to see a return on its outlay.

"The reason stated is that the telcos are spending less, so Riverbed needs something new. Opnet gives something - but is it enough to get the telcos spending again?" he said.

"Unless the combination [of the two firms] can make it that existing infrastructures can be made to cope with predicted traffic for some time, or that it can ensure that investment in 4G LTE networks will be less of a gamble, the telcos will keep the money for direct, short-term investment in 4G, or divert it to the bottom line to make them look more profitable.

"Riverbed will need to show that what the combination does is at least twice as good as the next competitor - which will be tough."

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Daniel Robinson

Daniel Robinson is technology editor at V3, and has been working as a technology journalist for over two decades. Dan has served on a number of publications including PC Direct and enterprise news publication IT Week. Areas of coverage include desktops, laptops, smartphones, enterprise mobility, storage, networks, servers, microprocessors, virtualisation and cloud computing.

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