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Blue Coat To Acquire Solera Networks, Unveils New Business Strategy

Blue Coat Systems is no longer the Web filtering company you knew it as. The company, founded in 1996 as CacheFlow, has come full circle from going public in 1999, to being taken private by an investor group led by private equity firm Thoma Bravo in a deal valued at roughly $1.3 billion.

Since accepting a buyout from Thoma Bravo in December 2011, the company has made significant changes and added several new offerings, many of which have come as a result of acquisitions—another that was just announced.

New Blue Coat Systems LogoAt an event in New York City on Tuesday, Blue Coat announced that it has entered into an agreement to acquire Solera Networks, a provider of security intelligence and analytics solutions.

Solera is best known for its family of appliances (physical and virtual) that capture, store, and index network traffic which can be tapped to provide real-time or historical visibility to threats. The easy way to think of it is as “TiVo for your network”.

As a result of the acquisition, Solera’s DeepSee platform will bring security analytics and forensic capabilities to Blue Coat ‘s portfolio, something the company says will be an end-to-end security solution that spans protection to remediation to governance, while giving enterprises complete visibility into the content and context of advanced target attacks.

The acquisition is expected to close in June. Terms of the transaction were not disclosed.

Major investors in Solera Networks include Intel Capital which led a $20 million Series D financing round in January 2012, and Trident Capital which led a $15 million Series C round in July 2010.  Other notable investors include Allegis Capital and Signal Peak Ventures.

The acquisition of Solera Networks marks the third significant acquisition in the past six months for Blue Coat.

In December 2012, Blue Coat announced its plans to acquire Crossbeam Systems to expand its security and network optimization portfolio—a combination that would bring "complementary technologies into a unified portfolio", according to what David Murphy, BlueCoat's president, told SecurityWeek at the time. 

Earlier this month, Blue Coat announced that it acquired Netronome’s line of SSL appliances, a move that helps the company offer visibility into encrypted SSL traffic across enterprise networks—with high performance.

After Netronome’s SSL appliance technology is fully integrated with Blue Coat products, customers will be able to consistently apply policies to all traffic on the network, according to a blog post by Tim Chiu.

“Many networks face a crisis today as the rise in SSL-based traffic creates an unrealistic reliance on the endpoint to detect threats or data loss,” Greg Clark, CEO at Blue Coat Systems said in a statement. “By analyzing SSL traffic within the network, corporations substantially reduce risk.”

The acquisitions of Crossbeam, Netronome and Solera have laid the foundation for the new direction of the company, which was unveiled on Wednesday.

In what Blue Coat it is calling its “Business Assurance Technology blueprint”, the company is taking an approach designed to help organizations give employees, customers, partners, and suppliers the flexibility to choose whatever applications, devices, data sources and technologies they need to do their jobs, while reducing risk.

According to the company, Blue Coat products now enable enterprises to "unleash business growth, productivity and innovation" through the following:

Security and Policy Enforcement Center delivers business continuity by protecting against threats and data loss. With the Security and Policy Enforcement Center enterprises can provide a safe and productive Internet and network experience for users.

Mobility Empowerment Center extends protection and policy to users in any location on any device. With the Mobility Empowerment Center, organizations can successfully drive mobile business initiatives.

Trusted Application Center enables organizations to safely deploy and consume all types of applications. With the Trusted Application Center, businesses can achieve closer relationships with customers through the innovative use of applications. For example, insurance companies can accept photos of damages to speed claims processing.

Performance Center aligns IT infrastructure with business priorities to assure network performance and accelerate user experience across the extended enterprise. With the Performance Center, IT can effectively align performance strategies with key business strategies. For example, retail stores can provide a more tailored customer experience.

Resolution Center allows businesses to enforce compliance and initiate rapid remediation with deep security intelligence and analytics that provide insights on advanced threat and network events. With the Resolution Center, enterprises can adjust security policies based on in-depth security analytics and quickly recover from a data breach.

“For security to empower the business, it needs to get out of the way of the user while protecting the business and its data. Assuring business continuity is particularly important as enterprises offer new services to customers and cope with a flood of new devices and applications in their environments,” said Greg Clark, CEO of Blue Coat Systems. “With our Business Assurance Technology, security is about what you make possible.”

According to Blue Coat, the company has more than 15,000 customers worldwide, including 88% of the Fortune Global 500.

While Blue Coat does have a large, diverse customer base around the world, the company has taken heat from Internet and free speech activists after its Web appliances were found being used by oppressive government regimes that some say violate human rights and restrict the freedom of information.

In January 2013, the University of Toronto's Citizen Lab said devices from Blue Coat Systems were being used in China, Russia, Venezuela and other countries with "a history of concerns over human rights." 

Through its analysis, Citizen Lab discovered 61 Blue Coat ProxySG devices and 316 Blue Coat PacketShaper appliances, with devices found in Egypt, Kuwait, Qatar, Saudi Arabia, the United Arab Emirates, Afghanistan, Bahrain, China, India, Indonesia, Iraq, Kenya, Lebanon, Malaysia, Nigeria, Russia, South Korea, Singapore, Thailand, Turkey, and Venezuela.

In 2011, Blue Coat’s products were found in Syria being used for Internet filtering and monitoring. In response, the company said in a statement that its devices ended up in Syria after an "unlawful diversion" and that its appliances "are not intended for surveillance purposes.”

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For more than 10 years, Mike Lennon has been closely monitoring the threat landscape and analyzing trends in the National Security and enterprise cybersecurity space. In his role at SecurityWeek, he oversees the editorial direction of the publication and is the Director of several leading security industry conferences around the world.