Blue Coat targets speed and security

Blue Coat Systems has been making a lot of noise since it changed its name from CacheFlow a few years back. For one, the company has been shopping, picking up SSL VPN vendor Permeo earlier this year and acquiring the NetCache business from NetApp last month. And in its efforts to pick up more technology and customer bases, Blue Coat has won over some investors. The company sold part of itself to two venture capitalists - Sequoia Capital and Francisco Partners - for about $42 million.

Recently I sat down with Blue Coat President and CEO Brian NeSmith to learn more about what the company has in mind for its future and technology, and to discuss the overall application acceleration market.

Q: How would you classify Blue Coat's evolution from CacheFlow to proxy vendor into security and now acceleration provider?

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Blue Coat Systems has been making a lot of noise since it changed its name from CacheFlow a few years back. For one, the company has been shopping, picking up SSL VPN vendor Permeo earlier this year and acquiring the NetCache business from NetApp last month. And in its efforts to pick up more technology and customer bases, Blue Coat has won over some investors. The company sold part of itself to two venture capitalists - Sequoia Capital and Francisco Partners - for about $42 million.

Recently I sat down with Blue Coat President and CEO Brian NeSmith to learn more about what the company has in mind for its future and technology, and to discuss the overall application acceleration market.

Q: How would you classify Blue Coat's evolution from CacheFlow to proxy vendor into security and now acceleration provider?

A: I have been with Blue Coat since 1999 and it's funny because where we are right now is probably very similar to where we were then. When I came here, the company's focus was on caching content and storing it locally, or closer to the end user, to accelerate the application experience. The idea that you sit between the user and an application, with a proxy device, enables you to effectively make either end of that connection work any way you'd like. A proxy cache offers that very unique experience of storing content locally and manipulating the protocols to improve the end-user experience.

Q: What has changed?

A: In the CacheFlow days, we had great success mainly by selling to service providers for bandwidth savings and now our revenue stream is focused on enterprise companies. Basically since 2001 the enterprise has been the focus of our efforts.

Q: How do you help enterprise customers with your technology today?

A: We allow an IT organization to get very direct control, to dictate policy-based controls. And that is what got us to the revenue we are at today. [Blue Coat reported $125 million in revenue for 2005, an increase of $41 million over 2004, according to Network World's NW200 rankings.] We already had good Web acceleration capabilities to speed all different types of applications, and today we can couple acceleration with policy-based control down to the end-user desktop and security. On the same platform, we are able to deliver policy-based security and allow customers to accelerate content and control delivery.

Q: How have your recent acquisitions helped?

A: Permeo allows us to add to the proxy the ability to exert control over the desktop. It allows the desktop to become part of the corporate culture. It's our same story just extended down to the desktop.

Q: And what about NetCache?

A: Mainly what we are buying there is the customer base. We are going to be able to sell the NetCache product for a year and add it to the current proxy solution. It's a market consolidation task.

Q: How much is the acceleration market consolidating? Will there eventually be one box that does it all? Or will all the capabilities reside on the network?