Packet inspection/traffic management

Arbor & Ellacoya Team Up

Arbor Networks has announced that it will buy Ellacoya Networks Inc. , in a deal that will combine its network security technologies with Ellacoya's deep packet inspection (DPI) portfolio. (See Arbor Buys Ellacoya.)

In what the companies classified as more of a "merger of equals" than a pure acquisition, Arbor and Ellacoya say they will work together to integrate each other's technology into their respective product portfolios to create what they call "secure service control."

Arbor provides network visibility and security products to help carriers fight against distributed denial-of-service (DDOS) and other attacks. Meanwhile, Ellacoya makes DPI equipment that allows service providers to manage traffic on a per-subscriber and per-application basis.

The combination of technologies, which would bring together Arbor's high-level view of the network with Ellacoya's packet-level view, provides a compelling story for customers.

"If we bring those two things into one system that's unified and integrated, it gives carriers something they'd never had before, and something they're going to need, to roll out new IP services," says Arbor founder and CTO Rob Malan.

Yankee Group Research Inc. analyst David Vorhaus says the deal is indicative of "a blurring of the lines" between the network security and DPI markets. Vorhaus notes that DPI vendors Allot Ltd. (Nasdaq: ALLT) and Sandvine Inc. have both made security buys in the past year. (See Allot Snaps Up Security Minnow and Sandvine Bags Two in Shopping Spree.)

"For all the talk of DPI vendors about quality-of-service control, network optimization, and new service models based on the technology, security is still one of main drivers of carrier investment in DPI," Vorhaus says.

Ellacoya CEO Jerry Wesel admits that an increased focus on security was one of the reasons his firm did the deal. "Our customers love our DPI solutions, but want to see more on the security side," he says. "From our side, we really needed security to add to our solution."

The companies estimate that the combined market opportunity equals about $750 million, which they expect will grow to $1.5 billion by 2010.

The combined company will have about 275 employees and posted approximately $70 million in revenues in 2007. Wesel estimates that the company's sales could increase to $85 million by the end of 2008.

— Ryan Lawler, Reporter, Light Reading

Be the first to post a comment regarding this story.
Sign In