F5 Enhances Its Security Portfolio By Acquiring Versafe

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Last month F5 Networks (NASDAQ:FFIV) enhanced its security portfolio by acquiring Israel based Versafe Ltd., a provider of web anti-fraud, anti-phishing, and anti-malware solutions for an undisclosed amount. Being one of the leading provider which optimizes the delivery of network-based applications, F5 remains committed to provide its customers with secure access to data and applications from any location and device. Offering advanced web and mobile protection solutions, Versafe provides a comprehensive real-time detection and protection for every user, device and browser.

Though F5 claims that the acquisition will not have any material impact on its operating results, it helps make the company’s security, access, and mobile solutions (including its Application Delivery Firewall solution) stronger. Security and mobile application delivery are important growth markets for F5, and thus we believe that an enhanced product portfolio increases its competitiveness in the market.

This is F5’s fourth acquisition in Israel. Last year, the company acquired load management solutions company Traffix Systems for $120 million. In the past, it acquired MagniFire Websystems and Crescendo Networks for $30 million and $5.6 million, respectively.

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See our complete analysis for F5 Networks here

Security and Mobile Application Delivery Are Important Markets For F5

With the explosion of data and processing required online, rising number of remote workers and growing mobile customers, security has become a major concern for most enterprises. Some 92% of Forbes Global 2,000 companies reported data breaches last year. [1] Thus, this is one segment bound to witness tremendous growth in the coming years.

There is growing demand for applications and content as subscribers now interact with a number of different types of networks (3G, 4G LTE) and protocols. Additionally, newer, feature-rich mobile devices require more connections and bandwidth per subscriber. With increasing network complexity, reducing security risk is an important criteria for enterprises. Over the years, data theft technology has become more sophisticated and the global cyber-crime market is currently valued at $104 billion. ((HP, F5 Networks Expand Web, Mobile Security Offerings, eWeek, September 17, 2013))

With its BIG-IP 11.1 software passing the ISCA Labs test for network firewalls, F5 entered the Internet firewall market in February 2012. Since then the company has worked towards enhancing its firewall security portfolio with new and improved products. With the addition of Versafe in its portfolio, F5 is now more confident of providing greater protection to its customers by ensuring that it is even more secure to access data, applications and manage security credentials over its network.

The security market is highly competitive with players such as Cisco, McAfee, Palo Alto Networks etc. To boost the built-in security of its products, Cisco acquired security firm Sourcefire for $2.7 billion in June this year. ((Cisco buys cybersecurity firm Sourcefire for $2.7 billion to boost network protection, v3.co.uk, July 23, 2013)) Nevertheless, despite intense competition we expect F5’s increasing focus on security and mobile applications to benefit the company in the long-run. It has launched a gamut of new products and software solutions this year, which it believes will help boost demand and create new revenue growth opportunities for the future.

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Notes:
  1. HP, F5 Networks Expand Web, Mobile Security Offerings, eWeek, September 17, 2013 []