Solarwinds joins Google, Microsoft, IBM list

Solarwinds joins the list of companies like Google, IBM, Intel, Microsoft in doing lower than the Analysts  expectation in Q2 2013.

Solarwinds did 77.5 M in Q2 2013 against the expected amount of 78.9M. They are doing continuously for the second time. Even the revenue of Solarwinds is inclusive of the revenue from the newly acquired company N-able. If we deduct the revenue from N-able (around 6M - last year they did 24M), then the revenue is lower than the last quarter. That means they are shrinking Q-O-Q continuously for the second time.

This quarter growth of Solarwinds is the lowest ever y-o-y growth for them in the last three years. That too they were able to make it only because of the acquisition. Thompson, CEO of Solarwinds accepts that the N-able is doing better than expected. They didn't do well in new business.

Thompson conceded that "license sales results did not meet our expectations."

There is a large market for Network and Systems Management market. But no big company tapped it properly.

This trend shows Solarwinds will be doing around 318M down from the projection of around 335-340M earlier. If they do so,  they will have a growth of 19% Y-O-Y in 2013 which is the lowest ever growth for them.  Again the main contributor for this growth is N-able acquisition. Their basic products entered into a stagnation or even shrinking.

They are concentrating on various activities to increase the revenue in second half of 2013.

our outlook for the second half of 2013 includes aggressive investments in our business including new product features and modules, demand generation and branding activities, and additional resources within our sales and product development organizations,"

Saravanan

Solarwinds Growth Slump

SolarWinds growth slumped for the first time ever since they went public. The Q1 2013 result shows revenue of $72.93 M that is lower than the previous quarter. SolarWinds had always grown Q-O-Q. But this quarter they had a drop of 1% Q-O-Q.

They have grown Y-O-Y by 22%. Their Q1 2013 was greatly affected by the drop in their bigger deals. The revenue per customer has gone down in Q1 compared to the previous quarters.  Below is the statement made by Kevin CEO of SolarWinds.

a decline in the number of transactions that we closed in the size range of $20,000 to $75,000. 

The growth is mainly from the smaller end products like Log & Event Management product, Web Help Desk and Serv -U Managed File Transfer. The main products of SolarWinds sales have gone down in this quarter compared to last year same period.

The smaller end products need more sales people and that has become a limitation in the growth, as they are good at selling higher value products.

a reduction in the number of core products per invoice of approximately 8% as compared to the first quarter 2012 

In the recent past they have acquired N-Able for $120 M that will bring around $10 M revenue this year.  This also affected their stock, as there is a big drop in the cash balance. From mid May onwards the stock value started dropping. It has dropped by 30% in the last Three months.

Yesterday Zacks Investments Research downgraded SolarWinds rank to #5 (Strong Sell) from rank #3 (Buy).

Read more: http://www.nasdaq.com/article/solarwinds-downgraded-to-strong-sell-analyst-blog-cm253663#ixzz2WfnstprW

All the revenue-bringing products (Web Help Desk, Log & Event Management & Serv -U Managed File Transfer) of Q1 2013 are from their acquisition companies (Web Help Desk Software, Dameware, Serv-U). This shows, if they didn't go for acquisition, they would have ended with stagnant in growth in Q1 2013.

This year is going to be a challenging year for companies that are doing business on IT Enterprise Management especially on Network Performance domain and System Management domain.

Saravanan

SolarWinds to Buy N-able Technologies

SolarWinds to Buy N-able Technologies for $120 Million.

http://www.n-able.com/company/newsroom/press_releases/2013-05-21.aspx

 
http://www.obj.ca/Technology/2013-05-22/article-3254000/UPDATE-Nable-to-remain-in-Ottawa-following-120M-SolarWinds-acquisition/1

Solarwinds started to enter into the cloud business by acquiring N-able. N-able has RMM and MSP Service Automation Platform! They have products for

• Remote Monitoring and Management
• Asset and License Management
• Device Management
• Mobile device Management
• Password Management
• Patch Management
• Group Policy Management

N-able’s client base includes more than 2,600 MSPs worldwide, which serve approximately 91,000 small and medium-sized businesses. They have done $24 M in 2012. They are having around 200 employees.

N.able has doubled their customer base in 2012. This is one of the reasons for this deal.

Saravanan