Concord Widens Service Footprint With Aprisma Buy

In a merger of IT service software vendors, Concord Communications agreed to acquire privately held Aprisma Management
Technologies from Gores Technology Group for $93 million in cash.

Aprisma’s software suite, Spectrum, makes IT infrastructures and business
services more available to, and reliable for, end users.

Should the deal succeed, Concord, of Marlborough, Mass., will add root-cause
analysis, event correlation, fault management and service modeling software
to its application performance management tools, a core piece of its eHealth
Suite business service management portfolio.

Concord President and CEO Jack Blaeser said on a conference call Monday a
combination of the two companies will broaden Concord’s footprint and give
it the necessary software to manage customers’ IT stacks, including
networks, systems and applications.

With Spectrum, eHealth will better help clients align IT services to
business processes in order to meet service-level agreements, he said.

“The combined offering will enable us to aggressively pursue new
opportunities in the BSM, wireless and voice markets,” Blaeser said. “In
addition, since our products already co-exist in many customer environments,
we expect customers will be able to extend their existing investment in one
product line to the other.”

Complete service software stacks can be valuable propositions for companies
that sell management software. Together, Concord and Aprisma have pumped $650
million into research and development over the last decade, accruing more
than 100 technology patents.

According to research firm IDC, the network and systems management market
represents a $13.2 billion opportunity. Concord isn’t the only company with
designs to manage IT stacks. EMC recently bid for
Smarts Inc., a root-cause analysis and event correlation software
specialist.

Aprisma, which reaped revenues of $43 million in 2004, will operate as a
business unit within Concord. Aprisma CEO Mike Fabiaschi will join Concord’s
executive team and report to Blaeser.

Should the deal close in the first quarter of 2005, Concord expects to add
Aprisma’s 1,000 customers to Concord’s installed base of 3,000.

In related news, Concord said it estimates fourth quarter revenue to
be between $28.3 and $28.9 million, with earnings per share of six or seven
cents.