I’ve always thought that SolarWinds was a great target for acquisition. When I ask network administrators what they use to manage and monitor their infrastructure, one of the most common responses I get is SolarWinds’ flagship product, Orion. There are plenty of good products on the market, but SolarWinds definitely comes up in conversations more than anyone else.
I think part of SolarWinds’ popularity can be traced to its distribution model. Rank and file IT pros can download affordable products directly from the company’s website. Many of the network managers I talk to also say Orion is just easy to use and it does what they need it to do.
While I’ve been waiting for a network equipment vendor to come along an snap up the company, SolarWinds has been making some moves of its own. It recently filed an S-1 form with the SEC, an early step towards an initial public offering (IPO) .
According to its filing, SolarWinds has experienced strong growth over the last few years – revenue of $38.2 million in 2006, $61.7 million in 2007 and $93.1 million in 2008. The company has more than 80,000 customers, including 400 of the Fortune 500 companies.
This isn’t exactly the best time to go pubilc, but based on the financials it provided to the SEC, the company is performing well. It will be interesting to see how the market treats the IPO.
UPDATE: Got an email from SolarWinds PR folks. This S-1 filing is an update of a filing the company made with the SEC last year. So I jumped that gun in saying the company is moving towards an IPO. Looks like it’s simply keeping things in place for an IPO for if and when I decides to move forward… which would probably be when this bear market ends. That could be a long time from now.
Hey, do you notice a trend here?
Every quarter staffing firm Robert Half Technology surveys 1,400 CIOs about their hiring plans. As you can see, the percentage of CIOs who are increasing staff has been relatively steady for nearly two years. In the third quarter of 2007, 17 % of CIOs said they were adding new staff. Then it held steady at between 13% and 14% for about a year. Then it started to dip a little in 2008 before plunging to 8% in the first quarter of 2009.
Meanwhile, the percentage of CIOs who are cutting jobs is creeping upward. For quite awhile just 2% of CIOs were cutting jobs. That’s a remarkably low ratio, and given the way things are right now those days seem so far away. Now job-cutting CIOs are at 6% and no doubt still climbing.
The silver lining is that 83% of CIOs will maintain the status quo on IT jobs. Those with good jobs can take heart, but job seekers must be feeling pretty discouraged. (For some tips on how to prepare for a networking job interview, see Michael Morisy’s story).
At least networking jobs remain relatively hot in these dismal days. When asked which kinds of jobs are experiencing the most growth in their IT organizations, 15% of CIOs identified networking jobs, tied with help desk/technical support as the biggest IT growth area.
Also, network-centric skills continue to be resume gold. When asked which skills were most in demand, 65% of CIOs identified network administration, 47% identified telecommunications support and 46% tagged wireless network management.
Although Cisco and HP no longer have a cozy data center relationship, HP’s new $1 billion data center outsourcing deal with European insurance giant Aviva includes Cisco products.
The ten-year deal was struck between Aviva and EDS, HP’s IT outsourcing business. According to HP’s announcement of the deal, EDS will take over and modernize Aviva’s two UK-based data centers. Both HP and Cisco “will provide select tools, technologies and resources to EDS in support of Aviva,” the announcement stated.
As I’ve mentioned before, HP and Cisco useed to have a friendly relationship when it came to selling into enterprise data centers. HP sales reps often received incentives to sell Cisco networking gear along with HP servers, storage and software. But the data center landscape has changed in recent years. Cisco is increasingly moving in on HP’s territory with its Data Center 3.0 campaign and its rumored entry into the blade server market. Meanwhile, HP has renewed its focus on its networking division, ProCurve. It has launched its own purpose-built data center switches. Clearly these two companies will be battling for data center domination rather than cooperating with each other.
Although HP is trying to compete head-to-head with Cisco in data center networking, deals like Aviva are still going to happen. It’s unclear how much HP’s EDS division will push ProCurve gear over Cisco gear if it affects the EDS’s ability to win a big data center outsourcing deal like this. ProCurve is certainly making a name for itself, but it still lacks the high-performance 10 gigabit Ethernet switching pedigree that other companies such as Cisco, Foundry, Extreme and Force10 have.
The intersection between geek culture and hip hop has a long, vibrant history and has brought us many cherished pop culture moments.
Back in the 1984, there was Reveng of the Nerds. Who can forget the triumphant scene when the boys of Lambda Lambda Lambda clinched a victory at the Adams College homecoming carnival competition by wowing the crowd with a nerd rap with front man Lamar Latrell?
Then in 1999, we had Office Space. In a brilliant scene that seemed inspired by a John Singleton movie, Peter Gibbons and his co-conspirators gather in an open field with an HP Laserjet printer and let out all their TPS report fury, stomping, smashing and punching the printer into oblivion, all while the rap song “Still” by the Geto Boys eggs them on. Also we have the scene earlier in the film where Michael Bolton is stuck in traffic, singing along with another Geto Boys song.
Then two years ago we had Weird Al Yankovic’s masterful parody “White & Nerdy,” featuring a cameo from Donny Osmond. The scene in the back alley where he buys a VHS bootleg of the Star Wars Holiday Special is priceless.
[kml_flashembed movie="http://www.youtube.com/v/XbVtbc_XzrI" width="425" height="350" wmode="transparent" /]
As much as I love Weird Al’s hip hop homage to geek culture, NetApp has taken things to a whole new level. I gotta give a hat tip to Beth Pariseau over at our sister blog Storage Soup for this one. In this YouTube clip from NetApp that spoofs the climactic rap battle scene in the film 8 Mile with Eminem, two rappers, named for storage rivals NetApp and EMC, clash with each other for hip hop storage supremacy, tossing out classic lines like “It’s obvious you’ve got stage fright/Couldn’t save a text file with a gigabyte.” It’s not as funny as some classic moments from the past, but the quality of the rhyming and rapping deserves some special recognition.
[kml_flashembed movie="http://www.youtube.com/v/QSsNs6LPqT0" width="425" height="350" wmode="transparent" /]
Update: Amy Kucharik pointed out that any history of the intersection of geek culture and hip hop is incomplete without a reference to nerdcore hip hop master MC Frontalot. And I have to agree. Take a look at this video for “It is Pitch Black,” an excellent homage to Zork, the text-based role playing game from the eighties that I have cherished memories of playing on an Apple IIc.
[kml_flashembed movie="http://www.youtube.com/v/4nigRT2KmCE" width="425" height="350" wmode="transparent" /]
What happens when you take a grizzled network admin and drop him in the wilds of Texas? I’m not sure either, exactly, but NetQoS put up a Man vs. Wild spoof featuring Cisco routers and NetFlow grub. Bear Grylls he’s not … but then again, I hear Bear himself needs off-screen assistance when he’s trying to keep 5 9′s of LAN uptime. I’ve included a clip of the real deal after the jump, for your grub comparison.
[kml_flashembed movie="http://www.youtube.com/v/trmgoIVINVw" width="425" height="350" wmode="transparent" /]
Belden, which bought wireless LAN vendor Trapeze Networks last year, is trying to open up a new sales channel for wireless infrastructure. The company announced exclusive distribution agreements for Trapeze WLAN products with Graybar and Anixter International, two of the leading distributors of network cabling in the world.
When Belden purchased Trapeze some experts were left scratching their heads about the deal. Belden is a leading manufacturer of cabling and other signal transmission technology. Many analysts have been predicting consolidation in the WLAN market, but they were expecting switch vendors like Juniper and Foundry to do the buying as networking vendors looked to build out a unified wired and wireless product strategy. HP ProCurve’s acquisition of Colubris seemed to fit in with this trend. Just look at a company like Cisco, which can sell its switches and WLAN access points to the same people. It makes sense from a marketing perspective.
But Belden is trying something completely different with Trapeze, and it will be interesting to see how it plays out. Graybar and Anixtar already sell Belden cables, and now Belden is trying to expand those relationships through Trapeze.
Belden is hoping that when companies are designing the basic infrastructure of a new building, such as network cabling and power, they will also design wireless infrastructure at that stage as well. If this happens, it would make sense for companies to buy their cabling and wireless technology from the same distributor as they prepare to build a new building.
And you thought you were underwater with your mortgage?
Back in 2000 Nortel bought application delivery switching vendor Alteon for about $6 billion in an effort to keep pace with rival Cisco. Nine years later, Nortel is bankrupt and it is trying to sell off assets as it restructures itself. Nortel announced last week that Radware was buying the asseets of the Alteon business, but neither company announced the value of the deal. Today the Ottawa Citizen published the numbers, based on a filing in U.S. bankruptcy court. Radware will pay Nortel around $17.5 million. That’s less than 3% of what Nortel originally paid for the company.
One of the circling vultures has finally picked some of the juiciest meat of the bones of Nortel. Israeli company Radware, an application delivery networking vendor, announced that it has agreed to buy Nortel’s Layer 4-7 appplication delivery switching business for an undisclosed sum. In the transaction Nortel is basically selling off the assets of Alteon WebSystems, a company it purchased nine years ago.
Nortel bought Alteon in 2000 for $6 billion in an effort to keep pace with Cisco, which had bought a competing company, ArrowPoint Communications, just months prior for $5.7 billion.
Nortel is currently restructuring itself under Chapter 11 bankruptcy protection. According to U.S. bankruptcy law, the sale must be conducted at auction, so other companies have an opportunity to best Radware’s offer before the sale is finalized.
In its announcement of the deal, Radware said the Alteon products would be sold under the brand Radware Alteon. The company announced that it would offer a five-year support plan on Alteon products to ease the worries of existing Alteon customers. Radware plans to hire some of Nortel’s employees, it said.
Other vendors in the application delivery space have been trying to capitalize on the uncertainty surrounding Nortel and its Alteon line. For instance, F5 Networks announced plans to offer up to $9,000 worth of credit to companies that agree to trade in their Alteon switches for F5′s competing Big-IP switches.
If consummated, Radware’s acquisition of Nortel’s Alteon business will solidify its position as a strong competitor to F5, Cisco and Citrix in the application delivery networking market.
What would the data center vendor market look like today if Carly Fiorina hadn’t been ousted as CEO of HP back in 2005? Under her leadership, HP maintained a cozy detente with Cisco. The two mega-companies happily engaged data center customers together. Cisco sold them switches and routers. HP sold them servers, storage and management software. And HP’s networking division, ProCurve, was consigned to operate in a relative backwater, carving out a solid niche with a pipeline into the SMB networking market.
Current HP CEO Mark Hurd has changed things up. First he named Marius Haas, a rising star at HP who had spent the previous four years overseeing the absorption of HP acquisitions, as ProCurve’s new senior vice president and general manager. Then Hurd and Haas snapped up the well-regarded wireless LAN vendor Colubris, giving ProCurve instant WLAN cred. Before the Colubris deal, ProCurve’s WLAN strategy was built upon an OEM partnership with Motorola.
Word soon came down from above. The incentives that HP had long offered to sales representatives who sold Cisco gear along with HP servers and storage were off the table. ProCurve products were the new priority.
Then last month ProCurve announced its first purpose-built data center switches. ProCurve executives made it clear while briefing reporters and analysts about these new switches that the incentives HP sales reps had for selling Cisco products were long gone. HP would be bringing the full might of its data center presence to bear on its ProCurve strategy. Enterprises could now expect HP sales engineers to offer packages of HP servers, storage, switches, software and services. Quite a proposition.
Of course, none of this has been happening in a vacuum. Cisco hasn’t been sitting still. For a couple years now, Cisco has made it clear that it intends to conquer all things data center as well. It has invested more than $1 billion in rolling out its new Nexus switch line. It has unleashed a barrage of new data center management software and services, labeled Data Center 3.0. And rumors continue to buzz about “California,” Cisco’s much anticipated entry into the blade server market.
So what happens next? It’s safe to say this battle will result in some acquisitions as each company tries to add some weapons to its arsenal. Allan Leinwand at GigaOM recently suggested a whole bunch of acquisition targets for HP. For instance, he suggested that HP snap up Arista Networks, Blade Network Technologies, or Force10 Networks in order to beef up its 10/100 gigabit Ethernet portfolio. For storage optimization, he suggested someone like DataDomain. He said HP should expand into WAN optimization and application delivery, by picking up someone like Blue Coat Systems or Zeus Technology. He also suggested HP target one of the emerging cloud computing specialists.
Meanwhile, Ashlee Vance at the New York Times blogged that Cisco is hoarding cash, leading many to speculate that a flurry of acquisitions is on the horizon. Vance says that Cisco CEO John Chambers is looking to strike next in the consumer electronics market with the $30 billion in cash it has on hand right now. But enterprise vendors are also rumored targets. Given Cisco’s strong investment in expanding its data center footprint, I think it will spend some of that money on vendors who will help it make war on HP. The EMC rumors just won’t go away, for instance. Last year I heard some whispers that Cisco might make a smaller deal for network management software vendor SolarWinds, but I haven’t heard much about such a deal lately. I’ve seen speculation that Cisco might also target VMware, which it already owns a small stake in. That would be a huge deal, but why would EMC sell it? VMware is a big performer for it. Cisco might buy EMC just so it can have VMware, but the price would be steep.
Once the dust settles over the acquisition blitz, what happens next? I just read a great blog post by Christopher Hoff (hat tip to IDC’s Abner Germanow) which offers a great overview on where all of this is going. For instance, Cisco isn’t really getting into the server business, he says. Instead, the so-called blade server Cisco is rumored to be working on is a natural outgrowth of the convergence of computing, where storage, servers and switches are becoming more tightly integrated into one infrastructure that supports virtualization and cloud computing. He writes:
My point is that what Cisco is building is the natural by-product of converged technologies with an approach that deserves attention. It *is* unified computing. It’s a solution that includes integrated capabilities that otherwise customers would be responsible for piecing together themselves…and that’s one of the biggest problems we have with disruptive innovation today: integration.
I imagine HP plans to travel down this road as well. Indeed, this should be a very interesting year.
It looks like the federal government might finally be cracking down on H-1B visa fraud. The controversial program, which many unemployed and underemployed IT workers will tell you is the reason they’re not earning a decent living, has been under fire in recent years. And last week the U.S. Attorney’s office in Iowa announced that the federal government has arrested 11 people in six states under suspicion of committing H-1B visa fraud. The U.S. Attorney has also indicted Vision Systems Group Inc., a New Jersey-based IT services company on 10 criminal counts, including mail fraud and conspiracy (You might notice that all of the links on Vision Systems’ web site appear to be inactive at the moment).
The H-1B visa system was designed to allow companies to bring highly skilled foreign nationals, particularly foreign nationals with IT skills, into the United States to fill jobs for which there is a shortage of domestic skilled labor. Companies are required by law to pay H-1B visa holders a salary equal to the prevailing regional wage for the role he fills. For instance, network administrators are paid more in New Jersey than they might be in Mississippi, so a company that hires a foreign worker to work in New Jersey should be paying that worker a New Jersey salary, not a Mississippi salary.
However, critics of the H-1B program, particularly Senator Chuck Grassley (R-Iowa), say that many companies are gaming the visa system, using the program to important cheaper foreign labor and displacing domestic workers. (Note that the U.S. attorney heading this particular investigation is from Grassley’s home state). Critics say companies frequently forge documentation about the qualifications of these workers and violate the prevailing wage requirements of the visa program. Last October, Grassley released a report which suggested that as much as 20% of such visas could be fraudulent.