Resolve Systems sees powerful synergies in acquisition of AIOps vendor FixStream

Automation platform provider Resolve, which has become a more energetic player in the market following their 2017 acquisition by a venture capital firm, sees major benefits from the deal for their channel, especially MSPs.

Vijay Kurkal, COO at Resolve Systems

IT automation and orchestration platform Resolve Systems has announced the enhancement of their platform with the acquisition of FixStream, a San Jose-based early-stage startup that was formed in 2013. The purchase price was $USD 24 million. FixStream is an AIOps [AI for IT Operations] player that brings some unique capabilities to their space. The acquisition is expected to close by the end of September.  Resolve Systems’ goal is to integrate the two complementary lines, initially as a bundle and with a roadmap integration over the months ahead.

“We are a broad IT automation platform, covering servers, storage, network security, and the operational element – the service desk,” said Vijay Kurkal, Chief Operating Officer at Resolve Systems. “We develop automation and orchestration that cuts across all these siloes. While not all of our customers are enterprises, larger and more complex customers benefit the most.”

While ServiceNow originally came into this area from the service desk, Resolve started in the networking side of things.

“We began in network performance management, and reducing manual effort from that, but we soon realized our platform could handle broader functionality, and over the last 8-10 years have built out a lot of integrations that provide automation,” Kurkal said.

“Automation has been around for a long time, but it’s just step one,” he added. “We are trying to create major change around productivity enhancements and improving responsiveness, to strip costs out of the business. The only way we believe companies can get those gains is a cross-silo and cross-platform approach. No one else in the market solves this as elegantly as we do. That’s why we are very deep in large organizations.”

The company’s Go-to-Market strategy changed significantly after their acquisition by growth stage-focused equity company Insight Partners in 2017.

“Before the acquisition, the company had a fantastic technology, but the approach was more opportunistic,” he said. “That’s a fairly natural process for any early stage growth company. We did a lot of work with MSPs, CSPs and telcos.”

The acquisition brought $120 million into the business.

“It brought new management talent with C-suite experience, as well as thoughtful investing in the product road map – both organically and inorganically,” Kurkal noted.

The channel presence has also been strengthened.

“We consider that channel to be an incredibly important Go-to-Market approach,” Kurkal said. “We just hired a worldwide SVP of Channels, Russ Eddleman, from Ivanti. We understand that the channel is a powerful source of scaling, and with a new leader we will power that. Our channel includes MSPs, VARs, and integrators – a variety of players.”

The acquisition of FixStream, which had been majority owned by the Indian IT giant Tech Mahindra, is expected to accelerate Resolve’s growth.

“They are an early stage AIOps startup, but a lot of people were talking about them,” Kurkal said. “They have been able to grow revenue 7x in the last 24 months. They also cater to the same market, the Fortune 500 and Global 1000, as us, and to the same buyers – senior IT executives.”

One key benefit is the bringing together of an AIOps vendor, and an automation vendor, two sectors which are logical adjacencies, but which have traditionally been separate.

“These two areas are highly complementary,” Kurkal indicated. “Most of our customers are also looking for an AIOps tool, and their feedback around this made us prioritize an acquisition here as part of the process of improving the customer journey.”

Kurkal said that while Resolve had multiple conversations, FixStream become the logical asset to acquire.

“They have a very unique product,” he noted. “They do dependency mapping in an agentless way that can map all the applications regardless of the layer. This allows pointing to all the servers and devices supporting an application and giving a real nice context. Their analytics engine also goes beyond just providing historical data, and tells you things like if servers are running critical applications or ones that are not that critical. It’s a very rich tool that starts with discovery, and does a lot of event correlations.”

The plan is for the two solutions to be sold as a bundle now, with the integration taking place in phases over the next couple quarters once the deal closes.

“In the next couple months, we will trigger automation out of the FixStream platform,” Kurkal said.

The acquisition opens up opportunities for partners on several fronts, Kurkal indicated.

“Apart from their analytics we felt they had unique mapping capabilities, which almost no other vendor in AIOps does,” he said. “For a customer, it generates a quick win. For an MSP, it helps with the first step in a new customer environment, which is listing all the infrastructure, and providing quick tangible results at something that MSPs said it took them 4-8 weeks to do.”

Kurkal said that the technology will translate into margin savings for MSPs.

“Most MSPs are on razor-thin margins on their large contracts, so managing in a cost-effective manner is key. This will make them able to extract more margin. Renewal time is a source of price pressure for most, but the automation here will provide them with a huge differentiator. It will also bring in new revenue streams, This is something that should be extremely exciting for partners in multiple ways.”

The companies will be doing a webcast about their plans on  Thursday, September 5th.

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