Blue Coat Systems, Inc., is merging with high-end networking appliance vendor Crossbeam Systems Inc. in a move the company says will bolster its security and network optimization strategy.
There is a classic user whose requirements are only met by something like a Crossbeam box. It's a high-end, niche part of the market.
Jon Oltsik, senior principal analyst, Enterprise Strategy Group
Financial terms of the deal were not disclosed. The two companies are currently owned by private equity firm Thoma Bravo. Blue Coat was acquired in February for $1.3 billion. Crossbeam was acquired by Thoma Bravo last month.
Sunnyvale, Calif.-based Blue Coat, which sells a line of Web security gateways and wide area network (WAN) optimization software, said Crossbeam provides the company with support infrastructure and a high-end, scalable platform. The combination could help bolster its presence in more complex enterprise IT environments.
Crossbeam, headquartered in Boxborough, Mass., sells the X-Series network security appliances, which provide a platform to consolidate security technologies in one location in the data center. The company can run unified threat management (UTM) platforms, combining firewalls, IDS/IPS and secure messaging software from a variety of vendors. The company said it is seeing growth in its line of virtual appliances. The company's specializes in data centers with high traffic volume, such as telecommunications providers and ISPs. Its customers include 16 of the 20 largest carriers in the world, including Telefonica and BT, as well as enterprise customers Volkswagen Group and Motel 6.
Blue Coat said it plans to integrate its software with the X-Series, making the combination an ideal control point in the network for managing security of both inbound and outbound traffic from all users in any location, said David Murphy, president and chief operating officer of BlueCoat. New customer initiatives and an increasing number of devices accessing rich media content are driving the need for more capacity and performance in the network, Murphy said. The two companies have a significant set of mutual customers using Crossbeam application blades, he said.
"Many of these companies are extending the enterprise to do mobility and new applications from a business standpoint for their employees and customer needs," Murphy said. "They're hybridizing their needs around the network topology and the Crossbeam business continues to be there and I believe will continue to grow."
Murphy said Blue Coat intends to maintain the Boxborough location and make further investments into research and development. Both firms also have a strong channel-partner based ecosystem, he said, selling through value added resellers and service providers. The aim will be to bring sales teams under the Blue Coat umbrella, he said.
Move an "arranged marriage"
"The value-add was that you could have a common platform for all of these leading edge software vendors," Jon Oltsik, a senior principal analyst at Enterprise Strategy Group said of Crossbeam appliances. "It's really instrumented for network processing; it's a high-end sophisticated box."
The acquisition of Crossbeam makes sense for Blue Coat, Oltsik said. Combining Crossbeam's hardware expertise with Blue Coat's software and distribution could address both firms' shortcomings, he said.
As for Crossbeam, Checkpoint, Sourcefire and other security vendors began building out their own high-end appliances, making it difficult for a third-party to compete in the space, but "there is a classic user whose requirements are only met by something like a Crossbeam box. It's a high-end, niche part of the market," Oltsik said.
Crossbeam's high powered networking equipment was popular when enterprises were trying to figure out what unified threat management was, said Pete Lindstrom, research director at Spire Security. The firm still has a number of large clients that maintain big data centers and huge physical networks, Lindstrom said. For the rest of the industry, on-premise, large data centers are falling out of favor, he said.
"This is an arranged marriage," Lindstrom said. "We'll have to wait and see how strong the integration is and what it means for Crossbeam and Blue Coat customers and partners."
The Thoma Bravo security portfolio includes Entrust, SonicWALL, Tripwire, and LANDesk Software.