Exhibit 99.1
Concord to Acquire Vitel Software
MARLBORO, Mass.--(BUSINESS WIRE)--Dec. 15, 2004--
Company Will Be First to Market with Complete Solution that
Proactively Manages Performance of Both Legacy and IP PBXs and Voice
Mail Systems from Multiple Vendors
Concord Communications, Inc. (NASDAQ: CCRD), a global provider of
Business Service Management (BSM) software solutions, today announced
that it has signed a definitive agreement to acquire privately-held
Vitel Software, Inc., a leader in voice network performance management
solutions. Vitel technology enables enterprises and service providers
to manage the performance of next-generation IP and legacy voice
networks and messaging systems, including voice mail, from multiple
vendors such as market leaders Avaya and Nortel Networks.
Industry analysts estimate there are currently more than 50
million enterprise phone lines connected to PBX systems in the U.S.
alone. In addition, the North American market for voice mail and
messaging equipment grew by a healthy 12 percent in 2003. While many
companies are currently evaluating migrating to IP telephony, the vast
majority of enterprise voice networks use legacy TDM technology, and
the market for proactively managing these systems is underserved. With
the expected acquisition of Vitel, Concord will be uniquely positioned
to address this evolving market and deliver innovative solutions to
customers before, during, and after their migration to an IP-based
voice network. The combined offering will be the first and only
complete solution to proactively manage voice network performance
across multiple vendors (e.g. Avaya, Nortel, Cisco), multiple
applications (e.g. PBX systems, voice mail), and multiple technologies
(e.g. IP, TDM).
"Although many organizations have begun to deploy voice over IP
(VoIP), the vast majority of today's business-critical voice traffic
still travels over TDM-based voice networks," said Jeff Snyder, Vice
President and Chief Analyst, Gartner Research. "Managing this
heterogeneous (TDM + IP) environment requires new monitoring tools,
allowing network managers to understand the impact of this new LAN/WAN
traffic, and proactively address capacity planning issues during
telephony migration. This knowledge is critical for ensuring Quality
of Service for voice communications, and for measuring delivery
against Service Level Agreements."
Convergence Drives Deal
For Concord and Vitel, the synergies between the two companies are
clear. Both companies have strong intellectual property and a rich
tradition of leadership in performance management solutions. Both
companies have historically sold to enterprises and service providers,
even sharing several joint customers. From a customer standpoint, the
combination also makes sense. At many enterprises, the IT and
telecommunications teams are converging, driving a need for fewer,
simpler management solutions that can manage more and more business
services - data, voice, etc. In the voice world, however, few existing
management solutions deliver the robust capabilities needed to meet
service level agreements or provide an integrated view into current or
future capacity requirements.
"For today's enterprises and managed service providers, voice is a
business service that often supports more revenue than any other
single service across the company," stated Jack Blaeser, President and
CEO of Concord Communications. "As a result, IT and telecommunications
organizations need proven tools that enable them to efficiently
support the business. With this acquisition, we expect to bring to
market a single solution that greatly simplifies management of voice
networks, regardless of the underlying technology or the vendor of
choice. We are confident that this transaction will allow Concord to
claim a unique new leadership role in the Business Service Management
market."
Founded in 1991 and based in Worcester, Massachusetts, Vitel
currently has more than 300 customers for its voice performance
management solution. Like Concord's flagship data network management
products, the Vitel solution provides comprehensive reporting,
capacity analysis, and proactive service assurance for legacy and IP
voice networks and messaging equipment. By using Vitel, customers can
greatly simplify management of a heterogeneous voice network and
automate many manual processes required for performance and capacity
planning.
"It has always been the mission of Vitel to deliver products that
enable the most efficient, reliable, and secure operation of the
enterprise voice network," stated John McCarthy, President and CEO of
Vitel Software. "Telecom managers today are being asked to solve
problems with the same level of precision as their counterparts on the
data network team, but without the same tools. As a result, it makes
perfect sense for Vitel to pair with Concord to deliver a
comprehensive performance management solution. We look forward to
making an important contribution to Concord's overall success."
The purchase price is equal to $4 million in cash plus the
assumption of debt and is expected to close in January 2005. Concord
expects the deal to be accretive in 2005.
More information is available online at:
http://www.concord.com/ccrd_vitel.shtml.
About Vitel Software
Vitel Software's performance management solutions manage disparate
telecommunications systems. They provide a unified network view that
empowers all organizational levels to control costs, optimize
resources, and assure security and quality of service. Fortune 500
companies, universities, government institutions, and other
organizations use Vitel's software products. Visit Vitel on the web at
www.vitelsoftware.com.
About Concord Communications
Concord Communications, Inc. (Nasdaq: CCRD) provides an integrated
software solution that enables companies to map their IT services to
business needs, measure their actual end-user experience, and manage
their applications, systems, and networks. More than 3000 companies
worldwide, including 23 of the world's 24 largest service providers,
rely on Concord's Business Service Management software to optimize IT
services to drive business success. Based in Marlboro, Massachusetts,
USA, Concord maintains offices around the globe and can be found on
the web at www.concord.com.
Concord Communications, Inc., the Concord logo, eHealth, and Map.
Measure. Manage. are trademarks of Concord Communications, Inc.
Forward-looking statements made in this press release are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
include statements as to the expected accretive nature of the
transaction, statements as to the nature, size, and opportunity in the
voice market, the benefits of the acquisition to Concord and other
forward-looking statements. Readers are cautioned that all
forward-looking statements involve risks and uncertainties, and actual
results could differ materially from the forward-looking statements
contained herein. Risks and uncertainties include, without limitation,
risks in product development and market acceptance of, and demand for,
the Company's products, specifically including the Company's business
service management solution; risks associated with sales execution;
risks associated with competition, specifically including competition
in the business service management market; risks in technology
development and commercialization; the failure to successfully
complete the acquisition or to obtain the expected benefits of the
acquisition, the risk that the transaction is not accretive, risks
related to the integration of Vitel or the assumption of unexpected
liabilities out of the acquisition; and other risks detailed in the
Company's filings with the Securities and Exchange Commission,
including but not limited to, the Company's annual report on Form 10-K
and quarterly reports on Form 10-Q. Any forward-looking statements
should be considered in light of all these factors. The information
contained in this press release is applicable only today and should
thereafter be considered historical and will no longer constitute the
Company's current expectations. The Company undertakes no obligation
to update information contained in this press release
CONTACT: Concord Communications
Eric Snow, 508-486-4508
esnow@concord.com
or
Greenough Communications
Gillian Farquhar, 617-275-6514
gillian@greenoughcom.com