Events in the Packet World

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Storage networking company Brocade Communications Systems Inc. last week agreed to acquire Foundry Networks Inc., a maker of enterprise LAN technology, for about $3 billion in cash and stock.

Foundry has 20 years history, a specialist in enterprise Ethernet LANs, have 1100 employees. The company didn’t disclose the number of staffs to lay off.

The acquisition purposed to merge the 2 companies power to fight with Cisco. Cisco has been the only company with both the vision and technology to create a FCoE unified fabric. Brocade, on the other hand, has had the FCoE vision but not the Ethernet goods. So after the acquisition completes, there will be 2 vendors in the market have the FCoE and Ethernet solution.

June 9, 2008 - Blue Coat Systems announces the acquisition of Packeteer is completed.

Last year (Sep 20, 2007).  Network- and application-performance management vendor announced plans  to acquire Network General for roughly $205 million.

The deal wascompleted in Nov 2007.  The merged company has around 750 staffs with the head quarter located in Boston and San Jose. NetScout didn’t have experience in an equal size acquisition in its history from 1984 when NetScout was founded. This acquisition is obviously a big risk and huge opportunity for NetScout to enlarge their competitive advantages in the network performance management market.

Network General invested resources into mobile carrier analyzing technology which includes 3G protocol analysis and expert intelligence. NetScout has also the plan to penetrate into the the mobile carrier market, so this merge will generate a new strong player in the telecom/mobile traffic analysis market.

NetScout indicates the changes to major customers are mostly benefits. The existing customer may get double-armed nGenius product with Sniffer technology built-in for their future upgrades. But till now, the benefits did not reflect clearly except NetScout decided to release a multi-thousand-dollar product, Sniffer Application Intelligence, into free to their exist customers.

NetScout Stock (Nasdaq:NTCT) price change in last a few month during and after acquires Network General

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Packeteer was a star company.  The company’s patented technology in traffic shaping did change a lot in the industry. Many customers like this concept and get this box at the WAN links.

However, the product designed for idiot cannot last long which is a law for the packet industry. After years and many installations, the customers found their dream cannot be realized by Packeteer. The traffic shaping only solves 10% of the problems. Well, when RiverBed, Cisco carries WAAS and Juniper got Peribits,  Packeteer started to face real challenges.  Even partnering with Microsoft to ship the iShape appliance for broader market did not change the trend.

Don’t be evil. This is a famous google term.  This is for management in public company too. The competition will not destroy the company, the corruption will. In 2007, Packeteer was exposed a finance scandal for tax evasion. The confidence of the employees, managements and investors are defeated.

Figure 1. Shows Packeteer price change after the tax evasion exposed.

The Bluecoat was mainly a web proxy company. The company is a more sales driven company without outstanding unique technology. The acquisition will bring many valuable technical resources to the company, so Bluecoat pays much comparing to the NetScout/Network General deal. The $268 million deal is just a start to merge, the real merge for the people and technology will be a long way to go.

This acquisition annouced at April 21, 2008.  PacketEvents will continue to monitor this event.