Network General

Network General Corporation

Formerly	Network Associates (1997–2004)
Company type	Public
Industry	Computer networking
Founded	May 13, 1986 (1986-05-13) in Menlo Park, California, United States
Founders	Harry Saal Len Shustek
Defunct	Template:End date and age
Fate	Acquired by McAfee Associates in 1997; assets spun-off in 2004; acquired by NetScout Systems in 2007
Number of employees	≈ 1,000 (1995, peak)

Network General Corporation was a Silicon Valley-based American tech firm operational from 1986 until 2007. Established by Harry Saal and Len Shustek, the company focused on network packet and protocol analysis tools. Its premier offering, the Sniffer, dominated the sector for several years. In 1997, McAfee Associates purchased Network General for $1.3 billion, resulting in the formation of Network Associates. After divesting core assets in 2004, the Sniffer division was reconstituted as Network General, which was subsequently acquired by NetScout Systems in 2007 for $205 million.

History

In May 1986, Harry Saal and Len Shustek, both seasoned entrepreneurs with backgrounds including Nestar Systems, founded Network General. Saal assumed the roles of president and CEO. That year, the company introduced the Sniffer protocol analyzer, an evolution of an internal diagnostic tool initially created at Nestar.

By 1988, Network General had achieved $8.9 million in revenue and a net income of $1.8 million from its Sniffer product line and related services. Early financing was provided by the founders until a substantial investment from TA Associates in 1987 accelerated expansion. Employee numbers grew from just two at launch to 15 by 1988.

The firm went public on Nasdaq (ticker symbol NETG) in February 1989, raising $17.5 million through an IPO managed by Alex. Brown & Sons. Additional secondary stock offerings occurred in 1989 and 1992. By year-end 1989, staffing had increased to 68 employees.

During that same month, Network General acquired Legend Software and rebranded its LAN monitoring solution as WatchDog, which debuted in April 1990. Although initial sales were modest, the company expanded through further acquisitions such as Progressive Computing in August 1991. This subsidiary specialized in WAN equipment and launched the LM1 PocketScope handheld WAN analyzer.

By 1995, cumulative Sniffer product sales reached $631 million with nearly 1,000 employees globally and monthly shipments averaging around 1,000 units. Hewlett-Packard was identified as its primary competitor.

In December 1997, Network General merged with McAfee Associates via a $1.3 billion stock exchange to create Network Associates. Shortly thereafter, they acquired encryption software developer Pretty Good Privacy (PGP) for $35 million. Founders Saal and Shustek exited the company soon after this merger.

Most PGP assets were divested to a newly established PGP Corporation in 2002, which was later purchased by Symantec in 2010.

In mid-2004, Network Associates sold the Sniffer technology business to investors led by Silver Lake Partners and Texas Pacific Group for $275 million, thereby reestablishing Network General Corporation. Concurrently, Network Associates reverted to operating under the McAfee brand.

In September 2007, NetScout Systems acquired this reformed Network General for $205 million and continued marketing Sniffer products until it sold off handheld network testing tools including Sniffer to StoneCalibre in 2018.