Better Together: Arbor, Ellacoya Merge

Arbor Networks is buying Ellacoya Networks in what CEO Jack Boyle on Thursday termed, “A merger of two growth companies.”

Terms of the deal were not disclosed, as Arbor Networks and Ellacoya Networks each are privately held.

Both firms cater to service providers and found themselves going after the same customers – so much so that it made sense to combine forces instead of making providers sign separate contracts.

“We felt that there was a huge advantage for our customers to put these products together because ours looked across the whole network from a broad perspective and [Ellacoya Networks’] products look deep into the application,” Boyle said.

Arbor Networks’ software analyzes security threats such as DDoS attacks, botnets and worms as well as network issues such as traffic and routing instability. Ellacoya Networks, on the other hand, uses deep packet inspection to help broadband providers optimize Internet services, such as personalization, for their subscribers. It also helps customers deploy services such as IPTV and digital video.

Overall, the merger is yet another sign that security and networking are converging, said Boyle.

Gerald Wesel, chairman and CEO of Ellacoya Networks, agreed.

“We both kind of got to the same point at the same time from two different perspectives and then validated that with our customers to make sure that this is truly something that they would find valuable,” he said.

The companies have yet to complete integration, which includes determining how to pay salespeople whose territories and customers overlap. Boyle and Wesel are confident they’ll get the job done, though, especially on the financial front. Arbor Networks and Ellacoya Networks’ combined 2007 revenue totaled more than $70 million, they said. By mid-2008, they expect to reach a run rate of $100 million. They also said the merger prepares the new joint company for an IPO.

Share this article: Email, Slashdot, Digg, Del.icio.us, Yahoo!MyWeb, Windows Live Favorites, Furl
Add this article feed to: RSS, My Yahoo, Newsgator, Bloglines