SolarWinds SolarWinds ( SWI), a Texas-based software maker that helps companies manage their networks, came to market on May 21 priced at $12.50 a share. SolarWinds is appealing to small and mid-sized businesses since it is cheaper and easier to implement. Since it debuted on the NYSE, SolarWinds stock has gained 84.6% to $23.08 on Dec. 8. "We think that the company can continue to grow with small- and medium-size businesses; however, we are skeptical of the company's ability to grow with larger enterprise customers due to much higher entry barriers," according to Morningstar. Competitors like IBM ( IBM), Hewlett-Packard ( HP) and Cisco Systems ( CSCO) are expected to incorporate increased functionality into their software, which would reduce the need for SolarWinds' products. SolarWinds quadrupled its sales in the past four years and still accounts for less than 2% of the total network management industry, according to Morningstar's estimates. "Should SolarWinds continue to win business from small customers, its basic, low-cost software and high profitability may make it an ideal acquisition for a larger competitor looking to expand its offerings," according to Morningstar. -- Reported by Jeanine Poggi in New York. Follow TheStreet.com on Twitter and become a fan on Facebook.