WLAN security company Bluesocket adds $10 million to coffers

Bluesocket, which got its start in the wireless LAN market back when people were more enthused about Bluetooth than Wi-Fi, this week is announcing $10 million in additional venture funding.

Having launched in 1999, Bluesocket is no start-up. The maker of wireless network security and management boxes claims to be closing in on its 1,000th customer and has now amassed $42 million in four rounds of funding.

One reason that the gateway vendor needs the funds is that despite the proliferation of WLANs, making money in the business isn't easy.  Weaker companies have begun closing down or getting bought out, while established vendors such as Cisco (a Bluesocket partner) and Nortel are winning more than their fair share of customers. Privately held Bluesocket won't disclose financial details, but says it doesn't expect to be profitable until late next year or the year after even though revenue is more than doubling year over year. Bluesocket cites education and healthcare as being among the most active vertical markets for WLANs, with government installations picking up.

Bluesocket CEO Ralph Calistri, who joined the company in August, says the new funds will enable the company to expand its product line as well as its sales and marketing efforts. Bluesocket will look, for example, to increase its field organization from roughly  30 people to about 40.

"The market is growing real fast," says Calistri, previously head of Web services management company Flamenco Networks. "Unless we have the additional money to expand both technically and in the field we won't be able to [take advantage of] expansion of the market."

While Calistri says the market still awaits the emergence of many giant corporatewide WLANs, he says Bluesocket's systems integration organization is seeing RFPs that indicate such networks might not be far off.  These RFPs show plans for Fortune 100 company  rollouts that span thousands of remote offices, he says. Customers are still challenged to figure out who the players are given the dozens of vendors in the market, Calistri adds.

The Burlington, Mass., company is tightlipped about product plans, though pledges to reveal new developments later this quarter and early in the second quarter. Dave Danielson, the company's vice president of marketing, says intrusion prevention technology is among the additions customers should anticipate. He also says the company's product line will be expanded to do more in the way of using roles and policies to keep the bad guys out and let the good guys in.

"The trust boundary in wireless is expanding to include not just authenticating users and ensuring what people are doing and where they are going, but it is also growing to include where they are coming from, what's the layout of the RF airwaves, what's the intrusion detection system," he says.

Jinx Walton, director of Computing Services and Systems Development at the University of Pittsburgh, says the school relies on Bluesocket devices to handle authentication and authorization for its wireless networks and even wired networks in some departments. The school is keeping an eye on competing products, such as WLAN switches, but is waiting to see how things shake out as vendors scramble to add  features.