Questions and Answers
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Q: What have you announced?
A: Micro Focus has announced today that it has completed the acquisition of NetManage, Inc. the NASDAQ-listed software provider, for approximately $73M.
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Q: Who is NetManage?
A: NetManage is a NASDAQ-listed software provider, headquartered in California, serving 10,000 customers and the majority of the Fortune 500, and three million licensed users. It specialises in Application Modernisation software, an area of technology that is highly complementary to Micro Focus’ core business
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Q: Why did you acquire NetManage?
A: The merged company provides greater scale, a broader portfolio of products and services, and a larger international presence for all our customers.
More specifically, Micro Focus has acquired NetManage to strengthen its position in the delivery of terminal emulation, host connectivity and service-oriented architecture (SOA) technologies within the Application Modernization market. Application Modernization is one of four key markets for Micro Focus. The others are Application Development, Application Portfolio Management and Application Information Management.
The acquisition gives Micro Focus additional Application Modernization capabilities to address the needs of Global 2000 and SME customers alike. This transaction significantly extends the Micro Focus product portfolio in the SOA space.
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Q: What did NetManage sell?
A: NetManage’s original product line was Rumba, an emulation product to connect PCs to hosted environments such as mainframes. Consequently organizations like airlines could continue to use their “green screen” mainframe applications and access them from corporate PCs. Terminal Emulation is a strong and mature market and the Rumba product line is a market leader.
Another key product is the web-integration product, OnWeb, which allows organizations to transform these hosted applications to internet-centric ones and bring customers SOA capabilities without significant upheaval. SOA capabilities including planners and connectors help enterprises to combine core systemswith packaged and other applications into more modern Service Oriented Architectures.
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Q: What are the benefits for NetManage customers?
A: NetManage customers will benefit from a broad range of Micro Focus’ Application Modernization products, allowing them to extract value from existing systems in more efficient ways and providing the opportunity to utilize existing business processes with greater flexibility. Specific benefits include:
• Increased product capabilities with a broader range of higher quality offerings from the expanded team.
• Joining the customer community of a true modernization partner with a heritage of ‘core systems’ technology investment spanning more than 30 years
• Lower risk and more stable future due to the financial and operational strength of Micro Focus.
• Increased product support capability.
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Q: What are the benefits for Micro Focus customers?
A: In general, Micro Focus customers will benefit due to the extended SOA product portfolio and richer functionality around host connectivity, bolstering and augmenting Micro Focus’ Modernization solution.
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Q: What sort of customers does NetManage serve?
A: NetManage has been in business for more than 18 years and has an extensive range of 10,000 customers from a variety of industries. Its customers tend to be larger enterprises, not unlike Micro Focus, and we share a large number of customers who can now benefit from our complementary sets of solutions.
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Q: How will Micro Focus market and sell NetManage products?
A: Micro Focus will rapidly integrate the NetManage sales and marketing organization into the Micro Focus operations to form a joint go-to-market strategy.
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Q: How does Micro Focus intend to support the delivery and management of NetManage solutions going forward?
A: For the foreseeable future, all products from both companies will be fully supported. Micro Focus will retain and maintain strong and popular elements of both product sets while meeting customer commitments. We will continue the development of major product lines while at the same time Micro Focus and NetManage teams will work on the future product roadmap.
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Q: Does this deal change the way you intend to serve existing Micro Focus customers?
A: Micro Focus’ customers will see no change in the high levels of customer service they have come to expect. The acquisition of NetManage will further extend Micro Focus’s product offering in the application modernization space, especially within the SOA market. We believe we can even better serve our customer base with this more comprehensive and broader product line. Meeting the needs of our customers will continue to be our first priority.
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Q: How will you protect the investments of NetManage’s customers?
A: We are confident that we will retain the NetManage customer base through continued investment in the NetManage product set and adding additional value to NetManage customers with, for example, our award-winning Support organisation. Micro Focus has a strong track record of product investment, as demonstrated in the continued and integrated product portfolios of two previous acquisitions – HAL and Acucorp.
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Q: What difference will NetManage’s customers see?
A: First, we can reassure NetManage customers that we plan to continue investment in those products and maintain them as an important part of our overall strategy. Second, we are confident the combined entity will continue to deliver the same great level of service that NetManage’s existing customers are accustomed to.
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Q: What are the plans for NetManage commercial terms and conditions?
A: There are no current plans to alter the existing commercial terms and conditions for customers.
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Q: How will this acquisition change the position of Micro Focus within its target markets?
A: The NetManageproducts expand the Micro Focus portfolio to include a specific category of the broader core IT systems modernization space (i.e. Extension) where there is a less extensive Micro Focus footprint today. Furthermore, this acquisition will greatly enhance Micro Focus’s capabilities in the important SOA market. Both sets of capabilities help grow Micro Focus’ overall Modernization offering, providing greater value to customers.
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Q: How much overlap is there between the two product offerings?
A: There is little significant product overlap. Where there is some, the combination of technical resources will look at the best possible options in the immediate term, as well as a more strategic view. One product area where we are very excited is the potential to combine the strengths of the SOA offerings from both companies.
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Q: If Micro Focus plans to continue the restructuring currently underway, will it be maintaining the entire product line from NetManage?
A: Micro Focus management believes the current product offering from NetManage is the right one and has no current plans to reduce the number of products offered.
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Q: Will Micro Focus radically change the R&D efforts at NetManage?
A: Constant product improvement and innovation are long-term success factors in the technology market. Micro Focus sustains its competitive edge with its core products through this philosophy. Consequently, Micro Focus is committed to maintaining investments in R&D for its entire range of technology offerings.
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Q: Will the old NetManage product names continue to be used?
A: NetManage has very strong and well-recognized product names like Rumba and OnWeb, and there are no plans to change this. To establish clarity in the marketplace of the broadened combination, we have plans in place to move the “NetManage” brand into the “Micro Focus” brand.
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Q: What work is required to allow Micro Focus and NetManage products to work better together?
A: NetManage products are largely complementary to the Micro Focus portfolio and, as such, we believe there will not be a substantial amount of work required to integrate the product offerings.
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Q: How are you communicating with Micro Focus and NetManage customers?
A: We have been and will continue to communicate with our combined customer base about some of the exciting opportunities we have together as a larger company that offers a broader range of products and solutions.
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