F5 Networks Buys Defense.Net - Analyst Blog

In a bid to strengthen its security service, F5 Networks Inc. FFIV 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 identity.

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 solutions portfolio.

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. JNPR, Cisco Systems CSCO and Brocade BRCD remain concerns.

Currently, F5 Networks has a Zacks Rank #3 (Hold).