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F5 buys Acopia for US$210M

Jo Maitland, Senior Executive Editor

Another networking company took a leap into the storage market today. Application switch company F5 Networks will acquire file virtualisation switch provider Acopia Networks for US$210 million in cash.

The acquisition comes about 18 months after Brocade Communications Systems bought NuView, and Cisco Systems's more recent acquisition of NeoPath Networks. EMC also made a move into this market buying Rainfinity.

"This is a big milestone for the company, it's a green-field market opportunity as far as we are concerned," said John McAdam, president and CEO of F5, on a conference call Monday.

Analysts on the call noted that it's not clear yet whether this strategy by the networking players will pay off. "Cisco bought Neopath and end-of-lived those product, what does that tell you?" one analyst asked.

According to F5, Acopia has 100 customers worldwide, a third of which are Fortune 1000 companies. "The product is very stable and well liked "¦ it will increase our reach into an adjacent and complimentary market," McAdam said. He expects Acopia's product to add US$25 million to US$30 million to F5's fiscal 2008 revenues.

F5 was vague on the integration plans for Acopia's products, saying only that it will give users the choice of a standalone technology or an integrated offering with F5's existing switches.

IDC claims the market for file virtualisation technology is on the rise. The firm said that IT executives are increasing their deployments

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of file-based storage by 50% to more than 200% a year as they consolidate existing data centres and roll out new fixed-content applications.

"These companies need "¦ file virtualisation to improve the efficiency and reduce the costs associated with creating, organising, protecting, and retaining exploding volumes of business critical, file-based information," said Richard Villars, vice president of storage systems research at IDC. The acquisition is expected to close shortly after Sept. 14, 2007, subject to satisfaction of the closing conditions