F5’s New Services Provide Enhanced Security At A Lower Cost

F5 Networks (NASDAQ:FFIV), the global leader in application delivery network, has been facing intense competition from Hewlett-Packard (NYSE:HPQ) for the second slot behind Cisco (NASDAQ:CSCO) in the data center network equipment market.  As a part of its next version of BIG-IP application delivery controllers release, the company recently launched  two new services to enhance its security portfolio – IP Intelligence and Enhanced DNS Services.

With the increasing shift to cloud based applications, security has become a major threat among enterprises and we feel that the company is doing well to address the security and performance risks associated with migrating to the cloud.

Application delivery network contribute above 60% to our current price estimate of $128, and F5’s BIG-IP product family represents the bulk of the company’s sales in this division. By enhancing security of its BIG-IP solutions, F5 not only instills confidence in its current customers but also makes its portfolio offering attractive to potential new clients.

1. New IP Intelligence Service Enhances Security While Lowering IT Spend

IP intelligence is a new cloud-based service that provides an extra layer of IP threat protection for inbound and outbound traffic. With IP Intelligence, organization can safeguard their infrastructures by detecting and stopping access from suspicious IP addresses. The service can be updated almost every five minutes to identify any malevolent activity, minimizing customer’s vulnerability to internet-based threats.

By leveraging F5’s BIG-IP application security manager and iRules technologies, IP intelligence enhances application performance by enabling customers to pool different threat detection capabilities, block out malevolent IP addresses and tailor performances to their specific needs.

In addition, by taking advantage of BIG-IP solutions ability to deliver unified services in a single platform, an enterprise can bring down its security spending.

2. Enhanced DNS Service Provides End-To-End Protection For DNS Systems

F5 claims that with increasing complexity of online applications, the number of Domain Name System (DNS) queries required to render a webpage is growing exponentially, significantly increasing load times. One solution is to tackle the same is to add more DNS servers, but apart from being an expensive option it can negatively impact the network.

F5’s BIG-IP solutions are positioned to ideally manage and distribute network traffic to the closet data-center based on business policies, access demand and network conditions. In addition, it’s iRule technology enables enterprises to decide how certain DNS requests are handled; for e.g. ensuring that the most critical requests are handled first.

By scaling up its DNS capabilities, F5’s BIG-IP global traffic manager product increases query response rates. With increased efficiency, an enterprise can significantly cut costs by reducing the number of DNS servers required to support their systems.

The company enhanced its set of DNS services by introducing additional capabilities such as DNS caching and resolving, DNSSEC validation, monitoring and other performance improvements that add scalability and  security to its previous solutions. Thus, apart from enabling a faster web-browsing experience, F5’s comprehensive offerings also provide end-to-end protection for crucial DNS systems.

We believe that F5 Networks has the capability to increase its market share in application delivery market to 38% by the end of our forecast period.

Our price estimate of $128 for F5 Networks, stands at a premium of above 30% to the current market price.

See our complete analysis for F5 Networks here

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