The long-awaited IPO for DDI (DNS, DHCP and IP Address Management) finally happened and, like Splunk the day before it, BLOX rocked. It opened at $16 and got as high as $23 and change during the trading day, settling in nicely at just under $21 per share.
It’s nice to see tech IPOs back and doing well. A few people have asked me if I thought this IPO was sustainable, and my answer each time was an emphatic “YES,” for the following reasons.
First, despite some of the recent tech misses this quarter, technology is on the upswing. I think the recent quarterly misses were more due to internal execution problems than a weak macro. So a good tech market will itself fuel more interest.
A bigger reason though is that what Infoblox does is red hot right now and is in screaming demand. The company has been focused on automation of IT tasks across the various IT silos and there is a huge need for this. Trying to manually coordinate IT tasks across silo and across physical/virtual boundaries is difficult, if not impossible, to do manually. We’re only going to see more virtualization and more tasks that require cross-silo coordination, so this is a wave Infoblox should be able to ride for a while.
The next reason I like them is that smaller management vendors are in high demand today. Netscout, Gigamon, Opnet, Xangati, the Cascade product from Riverbed, Solar Winds and Infoblox are on fire right now. The reason? Legacy management vendors like OpenView, Unicenter and Tivoli just don’t cut it in any more. They were built in an era of static, siloed IT and that era has long gone by. It’s time to retire those and invest in more current tools. All of the above mentioned companies should do well over the next three to five years (or end up acquisition targets).
Lastly, if you’ve seen any of my presentations over the last year or so, you’re familiar with the idea that we’re in the midst of an IT “perfect storm,” in which several forces are coming together to reshape IT. This is similar to the Internet perfect storm 20 years ago, when broadband, cheap PCs, Moore’s Law and the web browser reshaped IT. This perfect storm is being driven by cloud computing, virtualization, mobility and Metcalf’s Law (more and more devices being connected).
It’s an exciting time for tech right now. Infoblox was the latest company to have a successful IPO as a result, but I certainly expect more over the next year or so.
