In a bid to strengthen its security service,
F5 Networks Inc.
) has recently acquired Defense.Net, Inc., privately-held
cloud-based security solutions provider. The acquisition is
expected to boost F5 Networks' cyber security offerings. Financial
details of the deal were not disclosed. The acquisition is not
likely to have a material impact on its operating results.
Defense.net offers distributed denial of service (DDoS) mitigation
services that protect data centers and enterprise applications from
DDoS attacks. DDoS is the most common form of cyber-attack that
uses a large number of computers to bring down the targeted network
by choking it with too much traffic.
The acquisition will enable F5 Networks to provide its customers
secured access to data and applications, which in turn will create
a protected business environment.
Additionally, Defense.net provides complete, real-time detection
and remediation for its end-users, thereby reducing the risk of
theft of intellectual property and money sensitive data and
We believe that F5 Networks will gain significantly from this
collaboration. The combined solution can manage and protect against
DDoS attacks and at the same time connect public and private clouds
securely. Moreover, it will also strengthen F5 Networks' security
Due to the rapid adoption of cloud computing technologies, security
and data protection have become the top priorities for enterprises
in recent times. According to Gartner, the cloud-based security
services market will reach $4.2 billion in 2016. We believe that
the acquisition will help F5 Networks to extend on-premise and
cloud-based DDoS security services to its customers.
Apart from this, the company is also positive about its product
launches and growing demand for its products, particularly the
security products. We believe that the company's product refreshes
will boost revenues, going forward. Moreover, these initiatives are
expected to expand the company's total addressable market (TAM) and
result in client wins.
Better execution and focus on enterprise and service providers have
placed F5 Networks well in the application delivery controller
market. The company is also keen on expanding its cloud exposure.
Nevertheless, the volatile spending atmosphere and competition from
Juniper Networks Inc.
) remain concerns.
Currently, F5 Networks has a Zacks Rank #3 (Hold).
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