F5 Networks Expands Into Secure Data Transmission Sector

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F5 Networks (NASDAQ:FFIV) has entered its security platform into the market to ensure that application delivery, user access and even data centers are secure from cyber attacks. The company has announced two key security developments for enterprises to protect their web applications: its new global Security Operations Center (SOC) facility located at the company’s headquarters in the United States and its new cloud-delivered web application firewall (WAF) service. [1]

The SOC supports customers using the Silverline cloud-based application services platform by providing 24/7 access to highly specialised F5 security experts who monitor global layer 4-7 attack activities in real time. The SOC recognizes and safeguards against sophisticated threats, including Web injection, credential grabbing, man-in-the-browser (MITB), man-in-the-middle (MITM), session hijacking, password stealers, and more. The company’s WAF solutions let organisations confidently incorporate cloud resources while protecting apps and data from increasingly sophisticated security attacks, risks, and vulnerabilities. Silverline WAF also decreases operational expenses by outsourcing WAF policy management and compliance functions to F5’s specialised SOC resources.

Cyber-based threats are being recognized as constituting a top economic risk. In a 2012 World Economic Forum risk report, cyber-attacks ranked as the 4th most likely risk faced, and in the 2013 edition cyber-attacks, data fraud/theft and digital misinformation were noted as possible contributors to ‘digital wildfires’ in a hyper-connected world. The potential reach of cyber-crime is vast — including much of the global economy. 70% of households and 94% of businesses with 10 or more employees are online. There is a growing demand for applications and content as subscribers now interact with different types of networks and protocols. Additionally, newer, feature-rich mobile devices require more connections and bandwidth per user. [2]

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The data-networking industry in which F5 operates has gone through many innovations in the past decade. The rise of virtualization, cloud computing and now software-defined networking has kept industry evolving and innovating. With increasing network complexity, reducing security risk is an important criterion for enterprises. The cyber security market is estimated to grow from $95.60 billion in 2014 to $155.74 billion by 2019, increasing at a CAGR of 10.3% from 2014 to 2019. [3] Owing to the growing awareness of its security solutions in the market and tech-savvy customers, F5 believes that security segment offers huge growth opportunity and expects the strong sales momentum to continue in the coming quarters as well.

Our price estimate of $128 for F5 Networks is almost in line with the current market price. Below are two key factors that can significantly increase the company’s valuation.

See our complete analysis for F5 Networks here

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Notes:
  1. F5 announces new global security operations centre, June 9th, 2015 []
  2. Cyber-crime, securities markets and systemic risk, WFE, Page 9, July, 2013 []
  3. Cyber Security Market Worth []