Deal Radar 2008: Zyrion

Continuing the trend of technology democratization, Zyrion provides mid-market enterprises with business service management (BSM) and IT infrastructure monitoring software. Their flagship BSM product, Traverse, is based on technology that is being used by large enterprises worldwide.

Zyrion’s objective is to fill a gap in the marketplace: mid-market companies were looking for enterprise-level BSM and network management products in an attempt to move up from smaller tools like Solarwinds and WhatsUp Gold. Without the operational budgets to deploy and run large products like the Big 4 (BMC, HP, CA and IBM) can, mid-market companies require solutions with capabilities such as end-to-end correlated network and application monitoring, real-time status of IT services, integrated business/technical views and SLA management. This solution must be easy to install, use and run with only one or two people to manage it.

Zyrion is attempting to meet mid-market companies’ needs with its new Traverse solution, introduced on November 10. Traverse is a BSM application that provides real-time visibility of the performance of IT services, offering customers business-oriented views of their IT infrastructure with a much lower total cost of ownership (TCO) than legacy solution alternatives.

Vikas Aggarwal, founder and CEO of Zyrion, has been an entrepreneur and senior executive at multiple technology companies for over 20 years. He was the founder and CEO of Fidelia, a venture-backed IT infrastructure management software company, which was later acquired by Network General. At Network General, he was the VP of Product Management, where he oversaw product strategy through its acquisition by Netscout in late 2007. Prior to Fidelia, Aggarwal was GM at GES Internet, which was acquired by Verio in 1997.

The company was founded in January 2008. It is currently privately funded and may explore financing in 2009 if an opportunity to accelerate business progress and growth arises. Zyrion has its corporate offices in Sunnyvale, California and a development center in India. 

The overall market size for network management solutions (which includes BSM) is over $3 billion. Zyrion has adopted a traditional enterprise software business model, with part of the expenditures on software licenses and part on implementation services. The company also has an on-demand or SaaS solution (with a low up-front cost and no contract) in addition to the traditional enterprise licenses on offer. Traverse is available in three editions, with the lowest one free to users. Pricing for the other two starts at $50,000 with an average price of $90,000.  

Zyrion targets mid-size companies that are smaller than those in the Fortune 1000.  These companies have sufficient IT, computing and applications complexity to warrant an investment of $80,000 to $300,000 in network management systems but have limited staff so are looking for products with very low TCO. Zyrion has the potential to grow rapidly if they can fulfill the unmet needs of this large available mid-market segment. 

To penetrate the market, the company has used a mix of advertising and direct sales to prior contacts, customers and prospects. The company says that they have several customers, including an Ivy League institution in the Northeast, a premier video gaming service and Alexander Open Systems, a major MSP in the Midwest. Zyrion also said revenues are growing but have not disclosed revenue figures.   

There are currently very few players offering a BSM solution for the mid-market segment (Nimsoft recently acquired Indicative, which had some BSM functionality). Most other players in this segment, such as Nagios, Cittio and Groundworks, are pure network management vendors.

Zyrion says that it’s too early to plan an exit strategy and that their immediate objective is to gain a leadership position as a BSM solution provider in the mid-market space and within a few years, be the leader in BSM software revenues in the mid-market. This month Zyrion was on the list of Network World’s Top 10 IT Management Start-Ups to Watch.

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*IBM’s Enterprise Software Acquisition Spree

This segment is a part in the series : Deal Radar 2008