NetScout Systems helps network administrators stay prepared. The
company provides systems that monitor and report on the
performance of software applications and the networks on which they
run. The company's probes -- monitoring appliances that can be
placed throughout a network -- allow administrators to collect
information about traffic flow and to optimize application and
network performance. Its nGenius Service Assurance Solution
monitors systems ranging from VoIP communications to customer
relationship management applications. NetScout sells directly and
through resellers and distributors to corporate and government
customers. Customers in the US account for about
three-quarters of sales.
Sales and Marketing
Generating about 60% of its revenue through indirect sales
channels, NetScout primarily markets to midsized and large
corporate customers, including more than 90 FORTUNE 100
companies and about 40 from the FORTUNE Global 200 list.
Target industries include financial services, health care,
manufacturing, retail, technology, telecommunications, and
In the public sector, NetScout provides professional
services for its federal government customers to help them meet the
Security Technical Implementation Guides and Trusted Internet
Year-over-year revenue rose 12% in fiscal 2011. Product revenue
was up 13% behind strong demand in the enterprise and service
provider markets. The company restructured its sales force to focus
on these markets. Serving more than 130 service provider networks
in more than 40 countries, NetScout expects more growth from
such customers as they roll out 4G service.
Revenue for the service segment increased 10%, thanks in part to
healthy income from maintenance contracts and post-contract
customer support. Product revenue accounts for 55% of sales. The
product segment includes hardware while service comprises customer
support agreements, consulting, and training.
Year-over-year revenue declined about 3% in fiscal 2010, but
rose 58% in 2009. The company has enjoyed a profit every year from
2007 to 2011, with the exception of 2008.
Mergers and Acquisitions
In late 2012 NetScout acquired privately held, New
Jersey-based ONPATH Technologies in a strategic move to
aggressively expand its leadership position in the network
monitoring switch market. The ONPATH deal builds upon
NetScout's acquisition and integration of Virginia-based monitoring
and switching technology company Simena LLC in late 2011.
In other areas of its business, NetScout acquired IP voice,
video, and telepresence technology provider Psytechnics in 2011 to
boost its unified service delivery management
operations, which includes NGenius. The company is also
focusing R&D on unified service delivery management.
Other acquisitions are intended to help NetScout expand
internationally, such as its 2011 purchase of Dutch cybersecurity
firm Fox Replay.
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