Blue Coat CEO talks about sealing the Packeteer deal

* Future plans include enhancing the PacketShaper line, building Packeteer technologies into Blue Coat devices

Blue Coat Systems Monday announced the completion of its acquisition of Packeteer. The deal came together quickly: Blue Coat announced its intent to acquire Packeteer on April 21, and commenced its tender offer for the acquisition on April 30. Less than six weeks later, the deal is done.

Yesterday I caught up with Brian NeSmith, Blue Coat’s president and CEO. Here are some of his thoughts on the deal, how Blue Coat plans to enhance and package Packeteer’s technology, and the company’s long-term vision for improving network intelligence.

On the tender offer:“A tender offer is a lot faster because you don’t need shareholder approval. Since you get 90% of the shareholders to actually tender their shares, that’s a form of getting approval,” NeSmith says. “It follows a lot of the rules related to an initial public offering. So it really limits your ability to communicate and talk about things, which is a bit of a challenge. But in every other way it’s a lot faster.”Plans to enhance PacketShaper’s classification and performance management capabilities:“At a high level, the biggest thing is that PacketShaper is a product that we love and want to continue to invest in and really enhance,” NeSmith says. For example, Blue Coat plans to continue to refine PacketShaper’s application classification capabilities. “Beyond the 600 or so applications that they can currently classify, we’ll move aggressively to try to classify everything. We’re going to make a fairly large investment on the technology side there. Beyond classification, we’ll focus on performance management of the most critical applications.”Product rationalizations:“There are a number of products that [Packeteer] has that overlap with our current products. We haven’t completely finalized what’s going to happen and won’t for the next week or so, but I think we are going to incorporate a lot of those features into the Blue Coat product line.”Customer reaction so far:“It has been hard to tell so far, because we weren’t allowed to reach out aggressively and communicate with people so we don’t know as much as we would like. That’s going to be taking place over the next couple of weeks. Anecdotally, I think there generally has been a collective sigh of relief among the PacketShaper customers. I think they felt like that product was being a bit starved for investments, so I think they’re excited about some of the futures that we’ll be able to deliver, enhancing that product and driving some incremental capabilities.”Channel gains:“We traditionally and historically have been very successful in selling through the security VARs. What we’re excited about is that although we’ve made some investments and had some success in growing beyond security VARS into the network infrastructure types of resellers, that’s clearly Packeteer’s area of core strength.”On Blue Coat’s long-term goal of delivering a new level of network intelligence:“There’s another layer of intelligence that’s needed on top of the network layer. It includes aspects of visibility, being able to tell what’s running on my network. But that isn’t simply just looking at the packets, you have to become application- and user-aware. So visibility is the first leg of that triangle. Control and security are the second leg, being able to control, restrict and manage what people are doing, as well as securing that infrastructure to make sure it’s safe from external threats and internal abuse. Lastly, [the third leg] is about accelerating beyond just simply adding more bandwidth, but also using storage, intelligent use of protocols, to allow you to get better performance from that environment. What you start to see is that on top of the packet connectivity infrastructure you need this next layer of intelligence that includes that visibility, includes that security and control, and includes that acceleration, with all those ultimately being delivered as part of an integrated platform.”

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