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Opsware To Acquire Network Automation Leader, Rendition Networks

Opsware Inc, a provider of IT automation and utility computing software, announced it has signed a definitive agreement to acquire privately held Rendition Networks, a leader in network device automation, in a cash and stock transaction.

Rendition Networks is a network device automation company, with approximately 30 customers including large financial service institutions, government agencies and telecommunications companies. Rendition Network's TrueControl product is consistently recognized as the leading network automation solution on the market; in 2004 alone it was selected as the best network automation product in three separate comparative product reviews.

Modern Web applications are complex composites of many server platforms, software components and network devices. Not only is management of each component highly manual and costly, but there is no unified way to manage the application as a whole. The integration of Opsware and Rendition will provide a breakthrough IT automation system that not only automates management of server, software and network components, but also automates the complete operations lifecycle of the Web-based applications these components support. The combination will automate business services, UNIX, Linux, and Windows servers, software, applications, and all network devices including routers, switches, firewalls and load balancers.

"The combination of world leading server, application and network automation will provide a breakthrough automation solution unmatched in the marketplace," said Ben Horowitz, president and CEO of Opsware Inc. "The market demands a solution that takes into account and manages the entire application infrastructure, and Opsware will be the one company that can provide this. This accelerates our leadership in the IT automation market, a market that IDC estimates will be $5 billion by 2008."

Today's Web-based applications require a solution that can manage change holistically across the application infrastructure. For example, increasing capacity for an application requires coordinated changes across servers, software and network infrastructure. Today such changes are managed by separate tools, and by administrators with limited knowledge outside their domain, resulting in operational errors and inconsistencies. In the area of security for example, making changes on a business service often requires synchronizing server and software changes with firewall re-configurations.

"As the numbers of devices within organizations continues to explode, customers are demanding a single, integrated solution that automates all critical IT assets, including servers, software, and network devices," said Raghav Kher, Rendition's president and CEO. "Customers are tired of purchasing disconnected management systems from multiple vendors, all to manage the same underlying infrastructure. This combination will be the only solution to automate operations of the application lifecycle and all the key underlying infrastructure."

The transaction is valued at $33 million in Opsware cash and stock, consisting of $15 million in cash and approximately 2.68 million shares of Opsware common stock. In addition, Rendition's existing cash, after certain adjustments, will be distributed to its stock holders at closing in the form of a dividend, not expected to exceed $7 million.

The acquisition is subject to customary closing conditions and regulatory approvals. Upon completion of the acquisition, Opsware plans to integrate TrueControl with the Opsware System as well as offer both products stand-alone. Rendition R&D will continue in Redmond, Wash., and will be headed by Rendition CTO and co-founder Eric Johnson.