SolarWinds (SWI), parent company of N-able, has acquired cloud-monitoring company Librato for $40 million in cash. The announcement of the deal was released at the same time as the company’s Q4 and year-end earnings.

SolarWinds CEO Kevin Thompson told analysts during the earnings call today that Librato manages applications across cloud infrastructure.

MSP business revenues

Company executives reported during that same earnings call that SolarWinds’ MSP business revenues (the former N-able business) climbed to $38 million in 2014.  (We don’t have all numbers for past quarters of SolarWinds’ MSP business, but we reported here that the company said N-able hit revenue of $7.6 million for Q1 of 2013 which Thompson had said represented a 56 percent year-over-year increase from Q1 2012.)

SolarWinds’ subscription revenue includes revenues from both N-able and another acquisition from last summer, Pingdom, a performance management and website monitoring provider.

Librato deal and how it fits in with the strategy

The Librato acquisition builds on what SolarWinds has been working to create with N-able and Pingdom.

“As we evaluate the growth of the business-critical application, we see three ‘horizons’ of application deployment that require robust performance management — on-premise IT, IT as a service, and IT in the cloud,” said Kevin Thompson, president and CEO of SolarWinds in a prepared statement.  

“We expect that the requirement to manage existing on-premise infrastructure will continue, but will now be coupled with the need to manage the performance of infrastructure and applications either fully or partially deployed in private and public clouds,” he said.

Librato is still very early in its revenue model, CFO Jason Ream told analysts during the earnings call, and he expects the company to contribute $2 million to $3 million.

SolarWinds Q4 earnings numbers

SolarWinds reported total revenue for Q4 2014 of $118.4 million, a 22 percent increase over the same period a year ago.

SolarWinds reported GAAP diluted earnings per share 30 cents (compared with 28 cents per share for the same quarter last year) and non-GAAP diluted earnings per share of 51 cents for Q4 (compared to 41 cents per share for the same quarter last year).