Compuware Acquisition Expands Application Performance Management Lineup

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Compuware has acquired DynaTrace Software Inc. in a move that will expand the company's lineup of application performance management tools.

Compuware said Wednesday that it bought privately held DynaTrace for $256 million in cash and closed the acquisition July 1.

DynaTrace develops the PurePath line of application performance management software used to optimize application performance during software development, test and production phases. PurePath measures the performance of transactions processed by on-premise, cloud or hybrid applications.

"Organizations today depend on the rapid development and delivery of high-performing applications to drive revenues, customer satisfaction and brand," said Compuware CEO Bob Paul, in a statement. "To meet these demands effectively, IT organizations must have visibility into the performance of every transaction, from development, through test and in production. Together, Compuware and DynaTrace APM solutions allow IT to meet business demands for performance and agility through unbeatable insight into the user experience – whether in cloud, complex or traditional environments."

Compuware, which in the past marketed a broad range of software management and application development technologies, has increasingly focused on application performance management products in recent years. Compuware puts the worldwide application performance management software market at $6 billion.

In October 2009 Compuware acquired Gomez, a developer of Web application monitoring and management tools, for $295 million.

Compuware plans to look for ways to integrate the DynaTrace technology with its Gomez and Vantage product lines, said Steve Tack, Compuware's CTO, during a teleconference.

Detroit-based Compuware has been building up the Compuware Partner Network channel program it launched in June 2009.

DynaTrace sells its software through channel partners in North America and Europe, and Van Siclen said "we see [the acquisition] as an opportunity to expand that partner network." Compuware CTO Steve Tack said the company is reaching out to its partners with the right domain expertise and skill sets to carry the DynaTrace product.

Waltham, Mass.-based DynaTrace has some 180 employees and Compuware said "substantially all" of them will remain with Compuware, including the company's leadership team. DynaTrace has trailing 12-month revenue of $26 million and will add between $35 million and $45 million to Compuware's fiscal 2012 revenue, the company said.

Compuware executives have scheduled a press conference for later Wednesday morning to discuss how the DynaTrace acquisition fits into the company broader product strategy.

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