KANSAS CITY, Mo., July 21, 1997 -- Sprint (www.sprint.com) today
announced that it will acquire Paranet Inc., a leading provider of integration,
management and support services for distributed computing technology. The
$425 million cash transaction marks Sprint's intention to dominate the data
market all the way out to the desktop. The acquisition extends Sprint's
position as the world's leading data carrier by augmenting the company's
superior data products and services with Paranet's unique expertise in local
area networks (LANs) and distributed network systems.
Press Release
Sprint to Acquire Houston-Based Paranet Inc.
Acquisition marks Sprint's entry into end-to-end network and
systems management
For Immediate Release
KANSAS CITY, Mo., July 21, 1997 -- Sprint (www.sprint.com) today
announced that it will acquire Paranet Inc., a leading provider of integration,
management and support services for distributed computing technology. The
$425 million cash transaction marks Sprint's intention to dominate the data
market all the way out to the desktop. The acquisition extends Sprint's
position as the world's leading data carrier by augmenting the company's
superior data products and services with Paranet's unique expertise in local
area networks (LANs) and distributed network systems.
Called "Sprint Paranet," the new business unit will provide a comprehensive
menu of network and systems management services that will allow more
companies to outsource all or part of the design, implementation and
management of their distributed computing infrastructure -- desktop to
desktop. Sprint Paranet will offer business customers the ability to quickly and
cost-effectively use network technologies to increase their competitiveness and
business growth.
"Many businesses are asking Sprint to help them simplify the design and
management of their network systems," said William T. Esrey, chairman and
chief executive officer of Sprint. "Sprint Paranet gives our customers much
needed access to high-quality, proven services that help fully exploit the
competitive advantage of properly-utilized network assets."
According to Esrey, the new capabilities extend Sprint's services to the LAN
and the desktop for a more complete, end-to-end outsourced service solution.
Sprint already has hundreds of customers taking advantage of the company's
managed network services at the wide area network (WAN) level. The
combined capabilities will allow the company to address the demand created
by businesses that are managing today's complex distributed environments.
Today, nearly 50 percent of all businesses already outsource some or all of
their network and system management needs. The U.S. market for network
management services currently represents a $27 billion business segment, and
is expected to grow to a $43 billion market by the year 2000.
Enhanced Service Offerings
Sprint Paranet will provide a complete spectrum of custom-designed solutions,
including design, integration, implementation, and day-to-day management for
WANs, LANs (routers, hubs and servers), Internet/intranets and desktops.
Paranet's expertise is in the successful integration, management and support of
network and system components, including network hardware from multiple
vendors, collaborative groupware, multiple operating systems, network
protocols, client server infrastructures and network security facilities. As part
of Sprint, the Sprint Paranet unit will design and deliver networks using
networking and system components from throughout the industry. This allows
Sprint Paranet to preserve the customers' investments in existing equipment,
while migrating them to new and more effective technology.
"Today, client/server computing is at the heart of most corporations' mission
critical applications, and as a result, their networks must be robust, reliable
and cost-effective to support," said Michael H. Holthouse, president and
founder of Paranet. "This is not just a technology issue, but an integration of
hardware, software, networks and people, which produces the highly
productive environments that give companies a competitive edge.
"Our business customers run their businesses from the desktop, and as such,
they care about transparent access to resources, immediate availability and
high degrees of reliability so they know their resources will be there when they
need them," said Holthouse. "The Sprint Paranet solution takes corporations
through the entire life cycle of network and systems management, from
assessment, product selection and design, to implementation, training and
day-to-day operations. Our offering is without a doubt, the most complete in
the marketplace today."
Complete Spectrum of Custom-Designed Solutions
According to Sprint's Esrey, the acquisition of Paranet is the next logical step
in Sprint's strategic evolution toward meeting its customers' needs with the
fullest possible range of distributed computing services and solutions. "Our
customers are telling us loud and clear that they want someone to help them
manage the complexity of today's computing environments," he said. "Sprint
Paranet's mission is to off-load some or all of those complexities so our
customers can focus on their own core businesses, rather than wrestling with
technologies that can be handled more efficiently in an outsourcing
arrangement."
Among the many assets Paranet brings to network and system management is
the company's NOMAN(tm) (Network Operations Management) approach,
a uniquely powerful framework for organizing network and computing
resources to achieve business goals. Field-proven since 1991, NOMAN
translates processes, metrics, a knowledge base of industry-best practices and
a network maturity-assessment model, into meaningful tools to help businesses
maximize the value of distributed computing.
Proven Track Record of Performance
Founded in 1991, Paranet is a professional services firm focused on
management and support of complex distributed computing. With 1,100
employees, Houston-based Paranet has more than 900 technical analysts in
25 cities across the United States, and serves more than 250 major
customers, including industry leaders from a variety of markets. Representative
clients include Allied Signal, Beneficial, Blockbuster Entertainment, Chevron,
Hewlett Packard, Lehman Brothers, Mobil, Motorola, NationsBank, Sun
Microsystems, Texas Instruments and U.S. Robotics/3-COM.
Paranet recorded 1996 revenues of $66 million, and revenues are expected to
be approximately double in 1997. This year, financial results for Paranet are
expected to have an immaterial impact on Sprint earnings, and in 1998, Sprint
Paranet is expected to report positive cash earnings. The acquisition of
Paranet is expected to be complete by the end of 1997, and Holthouse has
been appointed president of Sprint Paranet. |
