Swan is devoured

Layer 4-7 networking specialist F5 Networks has bought WAN optimisation player Swan Labs for US$43 million. The move is indicative of rising consolidation in the application aware network market.

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By  Simon Duddy Published  September 7, 2005

Layer 4-7 networking specialist F5 Networks has bought WAN optimisation player Swan Labs for US$43 million. The move is indicative of rising consolidation in the application aware network market. The deal is expected to close in the first quarter of F5 Networks' 2006 fiscal year. F5 Networks is a long established application traffic management vendor and its acquisition is a response to increasing competition from Juniper and Cisco in this growing market. Like many WAN optimisation players Swan Labs is small but was recognised as a visionary in Gartner's latest Magic Quadrant for Web-Enabled Application Delivery, 2H04. The deal will allow F5 to extend its market leading Application Traffic Management product portfolio. Adding WAN optimisation capability to the efficiencies brought by Layer 4-7 traffic management will be an obvious value-add for many customers. “The opportunity to acquire such powerful solutions that nicely round out F5’s optimisation portfolio was extremely attractive,” says John McAdam, president and CEO of F5 Networks. “The acquisition will accelerate the execution of our strategy to deliver application acceleration and WAN optimisation for all applications and users. A distinct competitive advantage for us is F5’s advanced Traffic Management operating system that creates a shared application and network services framework that will enable Swan Labs' solution to integrate well into F5’s architecture. No other vendor in the market has this powerful capability,” he claims. The move follows Cisco’s application orientated networking (AON) initiative, which attempts to increase efficiencies in traffic flow from application to the network and vice versa. It also follows Juniper paying US$337 million a few months ago for WAN optimisation market leader Peribit. In addition, Citrix recently acquired WAN bandwidth optimisers NetScaler for US$300 million. “We've seen Juniper make some moves with its Redline and Peribit acquisitions, and Cisco has been making some noise with its AON launch. Overall, it makes our market more competitive. But it gives us encouragement because it makes the market as a whole more visible and creates opportunities that weren't there before,” says McAdam.

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