F5 Networks Buys Assets from Crescendo

F5, which is a leading player in the application delivery networking space, is buying assets from rival Crescendo, which is in liquidation proceedings. The move adds to F5's portfolio and removes a competitor.

F5 Networks, which makes application delivery networking products, is buying some assets of bankrupt Crescendo Networks.

Financial details of the deal, announced Aug. 15, were not disclosed. The nine-year-old Crescendo currently is in the process of liquidation, and its top engineers in its Israeli headquarters will be moved to F5's Tel Aviv offices.

The deal for Crescendo's intellectual property assets will be a boost to F5's market-leading ADN (application delivery networking) portfolio, and will further solidify F5's standing in the space by reducing the number of its competitors.

Crescendo's technology will add to F5's hardware and software offerings, according to Dan Matte, senior vice president of marketing and business development at F5.

"In particular, Crescendo's intellectual property and technical expertise provide compelling layer 7 FPGA [field-programmable gate array] capabilities for hardware and security solutions," Matte said in a statement. "With this acquisition, F5 will further strengthen its products' ability to address both the continuing exponential growth of Internet traffic and the rising number of sophisticated security threats impacting applications."

FPGAs are integrated logic chips that enable users to program the chip for particular tasks, which can improve the performance of the hardware. Having the Crescendo IP in place could help F5 improve the security and performance of its ADN portfolio.

That portfolio is designed to help businesses leverage the capabilities in virtualization, cloud computing and on-demand IT environments by improving the delivery, security and speed of applications as they move between the customer's infrastructure and PCs and smart devices, according to F5 officials. Gartner analysts have put F5's share of the ADN market at almost 50 percent, ahead of such rivals as Citrix Systems and Radware.

On July 20, F5 executives reported a strong fiscal third quarter for the company, including a 26.1 percent increase in revenue-to $290.7 million-from the same period in 2010. In addition, net income came in at $62.5 million, up from $40.5 million in the third quarter a year ago.

Much of those gains were in the Asia-Pacific and Japanese markets, particularly among the company's high-end products, according to F5 President and CEO John McAdam. Business in Europe declined, while sales in the United States grew only slightly, thanks in part to reductions in spending by the federal government.

McAdam at the time touted F5's new Viprion 2400 chassis-based application delivery controller, which the company released in June and that offered high-end ADC features at midrange prices. He also noted the company's plan to roll out version 11.0 of its TMOS operating system, which will offer more than 150 new features.

"With the rollout of these new products and a number of others over the coming year, we continue to believe that our competitive position in the traditional ADC market has never been stronger, and that the opportunity to expand our footprint in adjacent markets has never been greater," McAdam said in a statement at the time.

He also noted that during the third quarter, F5 added 95 employees, about a third in sales and support.