In-Depth

Profile: NetManage Makes Connections Happen

A focus on application connectivity has put NetManage in the right place at the right time.

• By Peter Varhol
• 12/01/2006

Any Windows 3.1 user is probably familiar with NetManage, Inc. Before Microsoft publicly acknowledged the Internet with the release of Windows 95, you probably used the NetManage TCP/IP stack for Internet connectivity. The company is still in business today, and it continues to provide connectivity solutions, but well beyond its TCP/IP roots.

"I had left my last company, and was ready to start another one," began Zvi Alon, founder and CEO of NetManage. "Microsoft had not yet made it possible to connect Windows to the Internet, so I saw a market opportunity there. We also provided our software to other distributors; and for a while, we provided the primary means for Windows users to get online."

Like many other opportunities to fill in holes left by Microsoft, NetManage's opportunity was short-lived. The introduction of Windows 95 made it possible for users to easily connect to the Internet using Windows without the third party TCP/IP stack. Alon continued, "We knew that the window of opportunity was small, but it enabled us to identify and fund other potential business ideas."

Its success with the TCP/IP stack enabled the company to acquire other companies in the connectivity arena, including its competitor FTP Software (which was unrelated to Fawcette Technical Publications, Inc.). These types of acquisitions provided NetManage with a large product portfolio that boasted both disparate and complimentary offerings.

Connectivity remained the common thread among these offerings. The ability for users to expand the scope of their activities by connecting to the Internet, by accessing data from other applications, or by connecting application components provides an enterprise with a means of transforming its infrastructure to enable new workflows or better ways of accomplishing existing tasks. Alon and NetManage saw early on that providing these capabilities to user and enterprises was a profitable foundation on which to build a software company.

The Next Phase
After the introduction of Windows 95, NetManage invested in adapters between different applications. Adapters enable developers to integrate enterprise systems with realtime connectivity needs, providing the ability for separate applications to work together in limited ways. You can use adapters to capture and create reusable data and features from multiple enterprise information systems without a lot of development effort. Adapters work well for one-to-one connections, asynchronous data access, and simple interactions between two applications. Unfortunately, you must update adapters almost as frequently as the applications they connect because these applications were not originally intended to work together.

NetManage also acquired Rumba in the late 1990s. Rumba is the most recognized brand in host access software because it increases user productivity and reduces the total cost of ownership. Rumba provides business users a graphical Windows environment in which to access and use information from a broad range of host systems, including IBM mainframe, IBM iSeries (AS/400), Hewlett-Packard, UNIX, and VAX.

Making Connections with Services
Several years ago, Alon and NetManage also foresaw the potential of the service-oriented architecture (SOA) as the next wave of application connectivity. SOA was a new type of connectivity, one that emphasized loosely-coupled connections between whole applications and between application components. The interfaces used to connect and interact are standard in SOA, even if the data being passed changed formats or the data set changed parameters.

This type of SOA-enabled connectivity was different from NetManage's adapters, which passed specific data back and forth between two applications and required frequent changes when one or the other application introduced a new version. The company knew that its adapters, while an important way of enabling connectivity, had their limitations. SOA opened up connectivity to a wider range of applications and uses.

Further, NetManage identified an additional opportunity that was overlooked by other vendors—the ability to connect to legacy mainframe and enterprise applications. These applications tend to be monolithic and self-contained, and they are typically less amenable to connectivity than other types of applications. However, enterprise applications also encapsulate a large portion of the business processes and logic for users, making them a very valuable commodity. The question that NetManage tackled was how can enterprises use these applications for new purposes for which they were not designed. How can you take an old enterprise mainframe application, keep its valuable business logic, and get that logic to work in conjunction with new PC-based applications?

In pursuit of this solution, the company invested in the development of its current flagship product, OnWeb. OnWeb offers a comprehensive development and deployment platform that enables you to create new business services by leveraging existing enterprise information systems, such as host/legacy applications, enterprise resource planning applications, customer resource management applications, and databases in a non-invasive manner.

OnWeb has become the most important product to NetManage's future, because it addresses an area of SOA that has not received much attention. The ability to make enterprise applications behave as services will assist companies in adapting to a more agile IT structure.

Alon commented on the company's current financial statement, saying that revenue was beginning to build up again since its most recent shift in product focus. NetManage, a public company, saw a dip in revenue over the past year, which has turned around this the past quarter. "It was a classic product transition time," Alon explained. "The encouraging thing is that sales of OnWeb have increased by forty percent in the last quarter. That validates our product strategy."

He also noted that some stockholders recently attempted to acquire the company and make it private. Alon said, "We turned [the offer] down because we believed that it undervalued the business we have today, and the business [that] we think we can have in the future. We have the opportunity today to continue the growth of OnWeb and build something that is worth a lot more."

Its focus on connectivity has paid off for NetManage since it was founded fifteen years ago. If SOAs continue their rapid growth in enterprises, NetManage's most recent investments in this new type of connectivity have a strong potential to offer even better payoffs in the future.

NetManage, Inc. Headquarters
20883 Stevens Creek Blvd.
Cupertino, CA 95014
www.netmanage.com/