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New Report -- Endpoint Security and Network Admission Control -- Market Size and Vendor Profiles -- We've had so much interest in our most recent report on Network Admission Control that we've decided to follow it up with another report profiling the vendors in the space, along with our market sizing estimates. As of now we're tracking 23 vendors providing solutions into this market. If you're interested -- jkatsaros@irg-intl.com
Branch Office Landscape Report -- Redux -- Two years ago we wrote a research report outlining the major US branch office market segments which turned out to be one of our most popular reports. Last week we announced the availability of an updated version of this report -- The 2005 Branch Office Market Landscape Report. Branch office technology is a fascinating IT topic, especially sine more than half of the workforces of the Fortune 500 work away from the main campuses -- there are now about 1.5M branch offices in the US -- that's about 150 K more than a few years ago. The updated report is available now. If you're interested -- jkatsaros@irg-intl.com.
Running with the Bulls Si Valley style: In societies that are more in touch with their feelings, males express their testosterone side doing things like bull running or self flagellation. Around here the equivalent seems to be competing with Intel or Microsoft in markets where these giants really care. Palo Alto Semiconductor is coming out this week with their expensive, stealth low-power Power PC chips. This must have sounded like a VC slam dunk a couple of years ago -- an A-class team out to do something Intel clearly can't do, and ride the Apple success becoming a significant supplier as personal electronics ramp up in CPU power. Unfortunately on the way to the bank Intel convinced Steve Jobs to switch to Intel, and Intel got the low power religion and promised the microprocessor equivalent of cold-fusion, leaving the bright guys at PA Semi with the moral equivalent of a hybrid version of a '32 Ford.
VeriSign's Big Move in the Identity Space -- While VeriSign's deal with eBay didn't make huge headlines, it's the stuff that could potentially open up lots of doors in VeriSign's battle against RSA in the identity arena. As part of the deal, VeriSign effectively sold its payment gateway business operations to eBay's PayPal division for $370M and, in addition to the cash, eBay agreed to deploy VeriSign technology to help secure its online transactions, including the purchase of up to one million two factor authentication tokens for use by eBay/PayPal customers. Even though the technologies have been around for awhile, these are the land grab in the two factor identity business with RSA's strategy largely based around signing up OEM type partners. VeriSign's direction via the way of e-Commerce mega players might turn out to be a brilliant move both to spark the adoption of two factor authentication as well as to use its brand to differentiate it in the channel. Onboarding a few million users is important but there's sure to be more to this battle over the coming months.
Our Newest Report -- Microsoft's Virtualization Strategy -- "Virtualization" is undoubtedly a hot topic today and at the center of active spending and active investing. If you care about infrastructure, then you need to start thinking about your own virtualization strategy. Underneath the talk and spin there is also important technology going into CPU's, operating systems and system management. While doing one of our 360-degree investigations of this important infrastructure technology we were struck by the degree to which Redmond seemed intent on taking technology developed by and large by groups intent on causing Microsoft problems (an Intel engineer confided that they thought of Virtualization as a way to get out of "Microsoft jail") into fuel to drive the Evil Empire. Microsoft seems to focus on how virtualization can drive their customers' total costs down while others dwell in the geeky subtleties of hypervisors and paravirtualization. Interested? jkatsaros@irg-intl.com
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A Tale of Two Users' Groups: Peter spent three days in Vegas at the Mandalay Bay, two at the Citrix iForum meeting and one at VMWorld. In both cases there is strong evidence that the high-tech buzz is back. VMWare announced a $100M quarter and blew out the floor space they had allocated. Citrix showed off their NetScaler and Net6 acquisitions to their remarkably loyal user base (reminiscent of the Apple Developer conferences). Superficially you would have to pick VMWare as the big winner between the two since they are the purveyors of hot technology (virtualization) and growing by leaps and bounds. Citrix on the other hand sells mainframe like technology to people who don't really trust PC's. But in our normal iconoclastic viewpoint (the VMWare folks can't decide whether we work for their enemies or are just idiots) we're not sure where VMWare ends up when the consolidation bubble slows (yes we used the "B" word!) while Citrix seems to be sitting on a very solid franchise. As our about to be released client report on Microsoft's Virtualization strategy concludes, it's going to be hard to complete with Intel and Microsoft who will give their piece of virtualization away (because they can and it serves larger purposes) so if VMWare is going to win big it must be at the cost of people like HP OpenView and Tivoli and we don't think they will give up significant revenues without a fight. On the other hand, Citrix has a remarkably dedicated user base that spans 98% of the F500 companies, mainframe ideas are becoming more and more popular driven by consolidation, business continuity and compliance needs, and maybe most important, it turns out that Citrix has been Microsoft's most valuable ISV two of the last three years. As we like to say in cases like this, film at 11!
VMWare Spinning Out?: As we keep track of VMWare, the care with which EMC has not integrated them is overwhelming down to the publicly announced separated financials. It seems pretty clear that EMC is keeping a spinout and potential offering a strong option (or more). Rumors suggest that some of the EMC management team share our uncertainty about VMWare's long term future (beyond the bubble). At the same time, it's clear that the public market would value VMWare -- a rapidly growing software firm -- higher if it were independent and not part of a ponderous storage company. Given their current run rate we would guess that EMC could spinout VMWare for a valuation 5X what they paid for it. Keep 20%, bank a 3X return and look like investment geniuses.
Network Physics Gets Insightful: Network Physics continues on its "interesting journey" and has just introduced a major upgrade to its network performance analysis tools. We've known the NP guys from the very beginning when it was (literally) a bunch of chaos physicists bent on applying chaos control theory to the optimization of packet flow through routers. The problem that NP faced was that of explaining to their prospects what they were talking about (few of whom were chaos theory literate it would seem). So they ended up building a pretty nice tool for visualizing what was going on in the network so they could explain the problems that existed that their form of packet jelly could fix. Now, many years later, the mega-geeky stuff that lead to having two Nobel Prize winning Physicists on their board of advisors (who apparently didn't talk much to each other) has been replaced by continuing evolution in their visualization and analysis tools, which as of the current release are getting really nice. Experience with the tools would apparently suggest that many of the acceleration vendors don't really understand what their customers need or what their own products really do (something we've suspected from time to time).
IBM's Latest Move -- As part of building on its already impressive SOA strategy, IBM last week announced its $100M plus acquisition of DataPower, run by two of our old friends -- Jim Ricotta and Eugene Kuznetsov. Being the pioneer in the space, the DataPower team got lots of arrows in its back as it evolved from its initial thoughts of providing value in accelerating XML to figuring out the technology's greatest value, for the short run at least, lay in sitting as a gateway function at the edge of a corporate network dynamically apply encryption, filtering, digital signing and other security functions to XML based Web Services. And, if you're going to sell deep into the Web Services market, who better to do that than IBM (maybe this is the acquisition that BEA should have made instead of its $200M PlumTree purchase in August)? Hats off to the DataPower team for hanging in there long enough to figure this out and in ringing the proverbial bell.
Check Point Goes Shopping -- Three of the most interesting Open Source projects in the infrastructure space are Nessus (vulnerability scanning), Tripwire (change detection) and Snort (intrusion detection/prevention), each being shepherded by a commercial (for profit) startup networking company -- Tenable, Tripwire and Sourcefire, respectively. Up until now it's been an interesting question as to whether or not there was any real money in Open Source ideas. With Check Point's $225M acquisition of Sourcefire the new question becomes not whether you can make money in the Open Source arena but "How much money can you make there?" Check Point's apparent dream is that Sourcefire brings network edge synergy with regard to security event management to the Check Point overarching firewall strategy. What of course remains to be seen is how easily Sourcefire's product line can be integrated into the Check Point worldview and what impact, if any, does this have on the Snort project. But for now, Marty Roesch, Snort's creator, can certainly put to doubt any concerns about the viability of an Open Source strategy. Presumably, this opens the Open Source doors for others as well.
Funding News -- Nine infrastructure startups raised more than $110M over the past couple of weeks.
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Date |
Company |
Sector |
Detail |
Amount |
Total |
Investors |
|
10/5 |
CyOptics |
Broadband Solutions |
Series F |
$27.0 |
|
Birchmere Ventures, JVP, Sprout Group, TowerBrook Capital Partners, and Eurofund |
|
10/5 |
Redline Communications |
Broadband Wireless |
|
$15.0 |
|
GF Private Equity Group, LLC, Matrix Partners and US Venture Partners |
|
10/4 |
IPolicy Networks |
Intrusion Prevention Firewall |
Series B |
$15.0 |
|
Ignite Group with Clearstone Venture Partners, WK Technology Fund, chairman Prabhu Goel, The Entrepreneurs' Fund and Parawin Venture Capital |
|
10/11 |
LogicalApps |
Business Automation Software |
Series A |
$14.0 |
|
Levensohn Venture Partners, Kinetic Ventures, Redpoint Ventures and ComVentures |
|
10/4 |
Kalido |
Data Warehouse Software |
Series C |
$13.5 |
|
Matrix Partners, Atlas Venture, and Benchmark Capital |
|
9/14 |
Blue Lane Technologies |
Patch Proxy |
Series B |
$13.4 |
$18.4 |
Benchmark Capital, Matrix Partners, and Duff Ackerman & Goodrich |
|
10/13 |
Caymas Systems |
Identity Gateways |
Expansion |
$13.0 |
$37.0 |
Levensohn Venture Partners, Kinetic Ventures, Redpoint Ventures and ComVentures |
|
10/10 |
Sensory Networks Inc. |
Hardware Acceleration |
Series C |
|
|
Individuals' Venture Fund and The Xilinx Venture Fund with Deutsche Bank Capital Partners Ericsson Deutsche Technology Fund, JAFCO Investment (Asia) and Technology Venture Partners |
|
10/1 |
Airsis |
Remote Asset Management |
Series A |
$1.0 |
|
Tech Coast Angels and other private investors |
|
10/3 |
3e Technologies International |
Wireless Infrastructure |
|
|
|
Intel Capital |
Corporate News -- Force10 Networks expanded its presence in Europe and Asia with three new technical assistance centers (TACs) that will allow the company to better serve its rapidly expanding worldwide customer base.
Mergers & Acquisitions -- Wily Technology, Enterprise Application Management, acquired Timestock, Inc. With the acquisition, Wily has formed a Customer Experience Management business unit led by Dave Chapman, former CEO of Timestock. Check Point Software Technologies, Internet security, and Sourcefire, creator of Snort and provider of intrusion prevention and real-time network awareness solutions, signed a definitive agreement for Check Point to acquire privately held Sourcefire for a total consideration of approximately $225 million. Covad Communications Group, integrated voice and data communications, signed an agreement to acquire NextWeb,, fixed-wireless Internet provider for business. HP announced an agreement to acquire RLX Technologies, Inc., an early pioneer and leader of blade hardware and management technologies. Financial terms of the transaction were not disclosed. Meriton Networks acquired Mahi Networks, uniting Meriton's high-speed optical networking systems with Mahi's Reconfigurable Optical Add/Drop Multiplexer (ROADM) solutions.
Partnerships -- Network Appliance announced its intent to work with SAP AG in an effort to help enterprises simplify data management in the SAP NetWeaver platform. Kazeon, information classification and management solutions for the enterprise, signed an OEM, development, and marketing agreement with Network Appliance. Kazeon and NetApp will integrate the intelligent data classification and search capabilities of Kazeon's Information Server with Network Appliance storage systems. Tideway Systems, IT Service Configuration Management, is announcing partnerships with the leading Business Service Management (BSM) vendors to vastly improve the level of accuracy and speed the process for delivering root cause analysis, and minimizing downtime and brownouts. BridgeHead Software partnered with OptoMedia Storage Solutions to bring a complete storage management unit - giving smaller companies the complete set of data tools in a single appliance. EMC Corporation, information storage and management, announced an advanced technology effort with Adobe Systems, to develop a standards-based interoperable content management infrastructure. NeoPath Networks, network file management (NFM) solutions, has become a member of the NetApp Partner Program. And, Exinda Networks, Australian supplier of network management and monitoring systems, introduced its global Partner Program that will assist Value Added Resellers and Systems Integrators to take advantage of the growing demand for network traffic management appliances.
Product News -- Cisco announced the Cisco Application Velocity System (AVS), a family of application acceleration, security and monitoring appliances for the data center, and the Cisco Wide-area Application Engine (WAE), a family of appliances designed to accelerate application delivery and provide file and rich media access to branch offices. VitalStream, audio and video streaming, introduced its next generation Streaming Service for Windows Media providing its customers with enhanced load-balanced traffic management, authentication of live and on-demand events and advanced business intelligence tools. Reflex Security, network intrusion prevention solutions, introduced the Reflex IPS MG, a multi-gigabit intrusion prevention solution. 3Com and its TippingPoint division announced the first vulnerability disclosed through the Zero Day Initiative (ZDI) and worked closely with the affected vendor to issue a corresponding patch, eliminating the threat of a zero day attack. F5 Networks, Application Delivery Networking, announced the availability of the BIG-IPR Application Security Module (ASM), based on F5's TrafficShield application firewall technology. Network Physics, application performance insight, announced NetSensory OS 5.0, featuring NetSensory Insights--the fastest way to find and fix application response-time problems across any network. Akonix Systems, security and compliance for employee use of instant messaging (IM), has launched L7 Remote User Agent, IM security and logging capabilities for mobile workforces.
Tumbleweed Communications, email security, released MailGate Appliance 3.0, protection from spam, viruses and other inbound content threats, adding new network layer edge defenses and bi-directional content filtering and policy management. And the company released MailGate Email Firewall 6.2, email security suite offering comprehensive anti-spam, anti-virus, policy management, outbound content filtering, monitoring and encryption. TippingPoint, intrusion prevention, announced that its TippingPoint Intrusion Prevention System (IPS) product line is a comprehensive, network-based solution to block phishing attempts and guard against identity theft. Symantec Corp., extended the capabilities of VERITAS Cluster Server to include full support for leading replication solutions. Websense launched Websense Corporate Edition, with key features such as delegated administration and reporting, remote administration, SNMP alerting, and anonymous logging. Blue Lane Technologies announced the PatchPoint System, delivering the industry's first inline patch proxy for enterprise servers. nCircle, vulnerability and risk management solutions, announced the general availability of version 6.5 of nCircle IP360, offering integrated network line of sight risk analysis and the company announced the nCircle Security Intelligence Hub on Oracle providing support for SQL connected Oracle databases in addition to its current XML-based support for Microsoft SQL Server and IBM DB2 databases.
Customer Wins -- Human Genome Sequencing Center (HGSC) at Baylor College of Medicine has deployed the Force10 Networks' TeraScale E-Series to build reliable scalability into its network and speed the processing of complex genome data. St. Joseph Health System, an Orange County-based integrated health care delivery organization, has selected and deployed Infoblox appliances to ensure nonstop delivery of domain name resolution and IP address management services. University of Texas M. D. Anderson Cancer Center in Houston is employing AutoMate by Network Automation, to integrate three critical systems: nurse staffing, time and attendance, and human resource. Archipelago Holdings , owns and operates the world's largest fully-electronic stock exchange, is using an integrated system from IMlogic and EMC Corporation to comply with strict federal regulations regarding electronic message archival in a Microsoft Exchange environment. Diversinet Corp., mobile-enabled personal authentication and security solutions, announced its MobiSecure Soft Tokens and MobiSecure Authentication Service Center (MASC) have been selected by Magna Entertainment Corp. Nortel announced two customer agreements (Ferris State University and City of Greenville, NC) and Wireless Mesh product enhancements designed to provide an innovative Campus Mobile Worker solution. Samsung Networks, an information technology affiliate of the Samsung Group, moved into Equinix Internet Business Exchange (IBX) centers in the New York and Silicon Valley areas. And Petfinder.com, the oldest and largest searchable directory of adoptable pets on the Web, has signed an agreement to establish operations within one of Equinix's New York area Internet Business Exchange (IBX) centers.
Momentum Releases -- From July through September, IMlogic grew quarterly revenues by 175 percent over the same period last year and increased its customer base to over 750 enterprise customers and more than one million seats under management. Network Appliance, networked storage solutions, announced the grand opening of its newest technology center in Research Triangle Park. Intellitactics continued its revenue growth trend with its thirteenth record-breaking quarter. The mix of new business included significant wins in the financial services and telecommunications vertical markets and in government installations. The Company also announced a 100% renewal rate for the quarter.
Executives On The Move -- Nortel Networks Corporation announced that its Board of Directors appointed Mike S. Zafirovski as president and chief executive officer. Onaro, change management software for storage networks, appointed Doug McNary as president and chief executive officer and member of the company's Board of Directors. CloudShield Technologies Inc., deep packet inspection platforms for security, VoIP, and traffic management applications, named Matt Jones as president and chief executive. Oblicore, provider of service level and business service management software, reported that John (Jack) Freker has joined the company as its chief executive officer. StrongMail Systems, email infrastructure software, hired Sam Cece as the company's Chief Executive Officer. Coradiant, real-user monitoring equipment for data center applications, announced that Rick Fink, a co-founding partner with Miramar Venture Partners, has been appointed to the company's board of directors. Reflexion Network Solutions, which uses sender identity technology to completely eliminate spam, appointed David Hughes as chief executive officer. netForensics, Security Information Management (SIM), announced that Dennis Cline, an active netForensics board member, will take over as the company's new CEO. Revivio, continuous data protection solutions, appointed Terry Leahy president and chief executive officer. Arroyo Video Solutions, software infrastructure to deliver personalized entertainment, appointed Rick DeGabrielle president and chief executive officer. AppForge, multi-platform mobile and wireless application development solutions, appointed Graham Wood to serve as Chief Financial Officer. Airimba Wireless, a high-speed wireless Internet service provider, promoted Abel Garcia to a newly created position of Executive Director - Operations.
Mindreef, collaborative solutions for Web services and service-oriented architectures (SOA), named Leland (Lee) Phillips as vice president of sales. Xelerated, network processing, announced that Michael Fortin, a former sales executive from Marvell, has joined the company as VP of Sales, Americas. Azaleos Corporation, messaging solution appliances built on the Microsoft technology platform, named Claire Murchie as Vice President of Services Delivery. Fortinet, Unified Threat Management and ASIC-accelerated, network-based multi-threat security systems for real-time network protection, appointed Hansen Chang as Vice President, Asia-Pacific. Sendmail, email security and infrastructure, has appointed former Check Point executive, Carol Stone as vice president of worldwide marketing. Veraz Networks, softswitch-based, toll-quality packet telephony solutions, selected Mohan Loke as General Manager of India Development Operations. Atrica Inc., the Carrier Ethernet Company, named Scott Messenger as its vice president of Marketing. ShoreTel, Inc., IP PBX company, announced that Joe Vitalone has been named vice president of sales and business development. BridgeHead Software has selected Ryan Witt as Senior Vice President of Worldwide Sales.
MX Logic names Marina Bogard Vice President of Business Development and Ryan Walsh Vice President of Marketing. Openwave Systems, open software products and services for the communications industry, appointed Jody Bilney as chief marketing officer. Cogito Inc., Enterprise Data Optimization, announced a new management team including CTO Ian Stiles, VP of Marketing and Product Management William Donahoo and VP of Sales David Vangeison. BridgeHead Software, enterprise storage management software products, has selected Ryan Witt to head the post of Senior Vice President of Worldwide Sales. BladeLogic, data center automation software, announced that John McMahon has joined BladeLogic as Senior Vice-President, Worldwide Sales & Services, and Melissa Cruz has joined BladeLogic as its Chief Financial Officer.
Orbital Data, WAN optimization and application acceleration solutions, hired Gordon Smith as vice president of marketing. Bytemobile, content dynamic networking, expanded its executive team with the addition of Michael Conley as vice president, Asia Pacific; Scot Briggs in the new role of vice president, sales operations; and Patty Downey as vice president and general counsel. Meru Networks, wireless VoIP infrastructure, announced former Engineering leader of Cisco's Access Business Unit, Om Tiku, has joined the company as Vice President of Engineering. PatchLink Corporation -, security management solutions, appointed Greg Head as senior vice president of worldwide marketing. Veraz Networks, softswitch-based, toll-quality packet telephony solutions, announced that John Ryan has been named the company's Vice President of Sales, North America. Visto Corp., wireless email services, named Steve Anderson as CFO, Frederic Aries as the general manager for its U.K. operations, Brian Marciniak vice president of sales for the Americas and Toshihiko Kobayashi country manager for Visto Japan. MiraLink Corporation, remote disaster recovery solutions, appointed Sherri Bakos to vice president of worldwide sales and marketing.
See links below for the complete text of those items mentioned above plus other news.
The InternetAcceleration newsletter and www.internetacceleration.com are produced by Internet Research Group. For more information or to keep us updated, contact John Katsaros at jkatsaros@irg-intl.com.
