Citrix buying VPN company Net6 for $50 million

Citrix Systems is buying Net6, a privately-held maker of SSL VPN technology, for $50 million cash, Citrix said Tuesday.

Citrix Systems is buying Net6, a privately-held maker of SSL VPN technology, for $50 million cash, Citrix said Tuesday.

The acquisition will boost Citrix's stable of secure remote access technology and give the company a foothold in the market for VoIP products, according to a joint statement released by the companies. Net6 is a 30-person company with headquarters in San Jose, Calif.

Citrix will add Net6's SSL Access Gateway and Application Gateway and Voice Office Application Suite to its product line. Citrix plans to use the technology to expand the options for customers who wish to remotely connect to network resources, including applications, data and voice applications.

The SSL Access Gateway will be sold as a stand-alone product and in conjunction with the Citrix MetaFrame Access Suite, where the SSL access technology will enhance the existing SmoothRoaming feature that simplifies Citrix sessions over mobile devices.

SSL VPNs are a popular technology for providing remote users with access to network resources such as e-mail, software applications and network file servers. As opposed to VPNs that use IPsec, SSL VPNs are "clientless," meaning they do not require a separate software application to be installed on the remote user's machine. They also rely on the SSL protocol, which is a part of most common Web servers and Web browsers and widely used to secure e-commerce transactions.

Citrix already offered an SSL VPN-like gateway with its MetaFrame Secure Access Manager, but that product was only suitable for very large Citrix deployments, said Rob Whiteley, an associate analyst at Forrester Research.

Net6's SSL Access Gateway will give Citrix a way to meet the needs of smaller customers and support remote access for a broader range of applications, such as e-mail, he said.

At the same time, selling the SSL Access Gateway as a stand-alone product will give Citrix a beachhead in smaller accounts that might be willing to buy more Citrix products later, he said.

Plans for Net6's Application Gateway and Voice Office Application Suite are less clear. Citrix said it wants to build an infrastructure that converges voice, data and applications creating "the ultimate mobile office."

For example, Citrix envisions mobile workers being able to use Citrix and Net6 technology to access hosted applications, Web-based applications and VOIP phone services all from a notebook, desktop or tablet PC, Citrix said.

The technology will eventually help Citrix live up to its new moniker of an "access infrastructure company," Whiteley said.

Net6 has proprietary technology that enables its products to capture and encrypt voice traffic lower in the IP stack, which keeps interruptions -- or "latency"-- to a minimum. However, Citrix still has work to do to unify its Secure Access Manager with the Net6 technology and coordinate security policies between the products, he said.

Citrix bought Net6 mostly for the SSL Access Gateway technology. However, the company is also excited about the prospect of entering the VoIP market, and Net6's technology and experienced developers will put Citrix "ahead of the curve" in that area, said Tom Craig, senior director of product marketing at Citrix.

"We've said in the past that 'Work is not a place, it's an activity,' and this builds on what we've been pitching as a vision," he said.

Citrix expects to complete the acquisition before the end of the year. That will reduce the company's earnings between 3 cents to 4 cents per share in the first half of 2005. Net6 will continue operating from San Jose under the leadership of Murli Thirumale, the company's current president and CEO, the companies announced.

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