Cisco to acquire network monitoring provider NetSolve

Cisco Systems Inc. channel partners will be able to offer real-time monitoring of enterprises' networks after the company agreed to acquire NetSolve Inc., the networking giant said Thursday.

NetSolve sells a service that remotely monitors the performance, health and status of data networks and can diagnose problems and provide troubleshooting, said Ned Hooper, senior director for corporate business development at Cisco.

Cisco will let channel partners provide the NetSolve technology to enterprise customers as part of their service and support offerings, Hooper said. End customers will get a view into the network through a Web portal and the channel partners will be able to use the monitoring information to give better support, he said.

Cisco will buy all outstanding shares of publicly held NetSolve for $11 per share, for a total of about $128 million. Because NetSolve has approximately $40 million in cash, the effective cost of the acquisition will be about $90 million to $95 million, Hooper said.

Cisco also will assume certain outstanding NetSolve options, which will be converted to Cisco options when the deal closes, probably in about eight weeks, Hooper said.

Real-time network monitoring is becoming more critical with the growing popularity of performance-sensitive applications such as VOIP (voice over Internet Protocol), Hooper said. NetSolve's technology allows for remote monitoring of LANs, WANs (wide-area networks), security software and individual devices on the network such as switches and routers, all through standard interfaces, Hooper said. In addition to support operations by channel partners, the NetSolve information can be used to optimize the network for critical applications.

NetSolve President and Chief Executive Officer David Hood will report to Wim Elfrink, senior vice president of Cisco's Customer Advocacy Group, and a majority of NetSolve's 292 employees should join that group as well, Hooper said. They will remain in Austin, Texas, where Cisco already has about 300 employees.