October 7, 2009, 12:00 AM

Compuware will acquire Gomez

Gomez Inc., which provides 113 Top 500 retailers with applications and services to monitor web site performance, will be acquired by Compuware for $295 million. The deal is expected to close next month.

Gomez Inc., which provides online retailers with applications and services to monitor web site performance, will soon have a new parent: Compuware Corp.

Detroit-based Compuware, a developer of applications, support software and systems management tools for businesses and their information technology infrastructure, announced today plans to acquire Gomez for $295 million in cash. The transaction is expected to close next month.

After the deal is complete, Gomez, which supplies web site performance monitoring services to 113 Top 500 retailers including Amazon.com, No. 1 in the Internet Retailer Top 500 Guide, will become a Compuware business unit. Gomez CEO Jaime Ellertson, other senior executives and most of the 272 current Gomez employees are expected to remain with Compuware. "This agreement marks a fundamental breakthrough in how information technology and business leaders can manage the performance of all the applications that drive their businesses," says Ellertson. "The complementary nature of our products and our already-existing product integration will allow Compuware and Gomez to rapidly deliver dramatically extended value to our mutual customers."

Gomez, which in 2007 filed for an initial public offering of stock but later put its plans to go public on hold because of the weakened economy, says the strategic fit with Compuware will allow both companies to provide retailers with a comprehensive program that can troubleshoot and fix problems across an entire information technology infrastructure. “Now we can go all the way back to the data center,” says Ellertson. “There’s an opportunity to not just tell a retailer there’s a problem on the e-commerce site, but to isolate which individual server is the source of the trouble.”

In July, Gomez introduced a major platform upgrade, simultaneously releasing integrated enhancements to its web load testing, web performance management and web cross-browser testing solutions, all for optimizing web and mobile sites and applications. The chance to broaden its base in the retailing and online retailing market, especially as more companies look to develop more commerce-enabled iPhone applications and mobile commerce sites, was among the main reasons Compuware acquired Gomez, says Compuware vice president of strategy and product management Mark Hillman. “Retailers already operate a plethora of mainframe computer centers and data centers and their infrastructure now has to be ready to support new channels such as mobile commerce,” says Hillman. “With Gomez, there’s a unique opportunity to offer a single view of the I.T. infrastructure to more retailers.”

Compuware, which in August released Xpediter/Eclipse 2.0, an analysis and troubleshooting application for mainframe computers, has been in business since 1973 and sells information technology infrastructure support tools to 46 Fortune 500 companies. The publicly traded company reported $1.23 billion in revenue in 2008. The acquisition of Gomez will help Compuware develop more software-as-a-service infrastructure management tools for retailing and other vertical markets, says Ellertson. “We will help retailers isolate where in their I.T. shop any problems are occurring,” he says.

Gomez will take advantage of Compuware’s deeper resources to develop more new products for online retailers, says Ellertson. “They have 10 times the sales force we now have and the typical size of their deal is about five times larger than ours. This is a good strategic fit.”

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