Figuring Out the Compuware/Gomez Deal

Remember that IPO that Gomez had filed with the SEC in May 2008? Investors waited and waited for it to be finalized. Analysts waited and waited. The industry waited and waited.

Well, the recent acquisition of internet performance monitoring company Gomez by Compuware for $295 million in cash (expected to close in November) lets Gomez off the hook, in terms of the IPO. But, more importantly, the move makes Compuware the first APM vendor to offer last-mile web performance monitoring, combined with back-end datacenter management. Gomez will become an operating unit of Compuware, retain its name, most of its employees and will be fairly independent in managing the business.

The motivation for the deal for Compuware isn’t hard to understand. It specializes in monitoring and management of application performance from the datacenter perspective: the servers, databases and applications that reside on them. Compuware is betting on APM as its future.

Compuware added end-user monitoring when it bought APM provider Adlex in 2005. And with the addition of Gomez, Compuware can offer an additional layer of front-end performance management, tracking the performance of last-mile Internet connectivity, how websites perform in multiple browsers, as well as the performance of complex Web applications using rich interfaces such as AJAX. This means Compuware will be able to present its customers a unified view of performance data, from the datacenter to the Internet connection to the browser, all from one vendor.

I’d say this is pretty significant, as it’ll make Compuware the first APM player to offer all this in one package. Gomez also brings tools for pre-deployment load and performance testing to the mix.

And there are implications for cloud computing in this deal, too. The combined entity can monitor cloud user experiences and correlate them to the back-end performance of those services. That can help determine when cloud-bursting or deploying new virtualized infrastructure is needed.

I’m looking forward to seeing how the merged parties work together and what it brings in terms of services, front- and back-end, to companies. We’ll be watching!