Compuware To Acquire Gomez For $295 Million - InformationWeek

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Cloud // Software as a Service

Compuware To Acquire Gomez For $295 Million

The move will enable Compuware to offer peformance management to customers with apps in the cloud.

Compuware Corp. announced Wednesday its plan to acquire Gomez Inc. for $295 million in cash. Compuware is a leader in on-site application performance management, and Gomez, a leader in Web application performance management. Compuware sees the acquisition as helping it better serve customers that have parts of their IT infrastructure in the cloud, and parts of it in their own data centers.

"There is a dramatic shift taking place in IT, as more and more business-critical applications move beyond the corporate firewall and out onto the Internet," said Compuware President Bob Paul in a video presentation released Wednesday morning.

The idea, Paul said, is that an IT administrator will be able to view, from a single dashboard, the performance of ERP applications running in his company's data center, the performance of an E-commerce Web site, and the quality of a Cloud-based provider's service. The companies' products already work together, but more integration will take place after the acquisition to provide IT and business administrators with more types of dashboard views, Compuware said. The deal is expected to close next month.

It appears that Detroit-based Compuware, with $1.1 billion in revenue last year and 4,275 employees, plans to let Gomez continue to operate as an independent entity. None of Gomez's 272 employees will lose their jobs as a result of the acquisition, the companies said, and the leadership team, including CEO Jaime Ellertson, will remain intact. Gomez, with $47 million in revenue last year, and customers that include Amazon, Facebook, Google and Yahoo, will retain its Lexington, Mass., offices.

For its first fiscal quarter ended June 30, Compuware reported net income of $51.1 million, compared with $34.7 million in the same quarter last year. However, revenues dropped to $214.4 million from the $298.6 million reported last year. Software licenses were down 34% to $40.5 million, and maintenance fees dropped 12% to $111.1 million.

Compuware emphasized software-as-a-service in its acquisition announcement, noting that about $100 million of its revenue came from SaaS versions of its products last year, and that Compuware and Gomez combined now have 25,000 organizations using SaaS versions of their products.

InformationWeek and Dr. Dobb's have published an in-depth report on how Web application development is moving to online platforms. Download the report here (registration required).

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