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Fortinet Acquires ADC Vendor Coyote Point

Security vendor Fortinet announced its acquisition of application delivery controller vendor Coyote Point Systems. Fortinet hopes the acquisition will boost its enterprise presence.

Fortinet, a maker of network security appliances, announced last week it was acquiring Coyote Point Systems, which makes application delivery controllers that are designed to accelerate traffic through a variety of techniques, including load balancing, SSL offload and compression. Fortinet already has its own line of ADC products called FortiBalancer.

Fortinet has framed the acquisition as a key step in expanding its presence in larger enterprises. "This acquisition ... allows the company and our channel partners to accelerate and further deliver on our vision of providing complete and comprehensive security into the enterprise," said founder and CEO Ken Xie in a written statement.

Not so fast, says Greg Young, a research VP at Gartner. Young says that the addition of application delivery controllers to Fortinet's data center-class firewalls could be of some interest to data centers that don't have enterprise-grade application delivery requirements, such as those run by mobile carriers. Mobile carriers are the biggest sector in an ADC market Gartner has pegged at $1.6 billion for 2012.

But other than that, says Young, Gartner doesn't see the acquisition having an impact on enterprise data centers. In fact, he adds, "we don't expect Fortinet to go after the enterprise ADC market unless they make very expensive investments in new channels and sales."

Rather, he expects the real impact of the deal to be in the SMB market, where an application delivery controller embedded in, say, a Web application firewall makes sense.

Coyote Point is one of many smaller players in the ADC market, which is dominated by F5, Citrix Systems and Riverbed. In the 2012 Gartner Magic Quadrant, Coyote Point was listed as a niche vendor. The report said Coyote Point products are "attractively priced" for mid-range enterprises.

Fortinet customer Erik Devine, chief security officer at Riverside Healthcare, says he's interested in how the new technology will be merged with Fortinet's products. "I'm curious to see if they implement the technology into current products or if they release an all new product line," he says. Riverside Healthcare is an integrated healthcare system built around the 325-bed Riverside Medical Center in Kankakee, Ill.

In announcing the deal, Fortinet said that there are no immediate plans to make changes to either company's product line, but that "Future products and solution offerings will be announced upon their availability."

Devine says he can see how Coyote Point's technology could be easily integrated into many of Fortinet's security appliances, which Riverside has been using since 2010.

"I am responsible for telecom, network, mobility, and wireless along with information security, so I'm really looking for technology to help with integration," says Devine. "Not just a log server, but the ability to link different technologies together so that it seems that my entire infrastructure is under one vendor."

At the moment, application load balancing isn't a huge priority for Devine. Much higher on the list is the need for an appliance that will protect Riverside against distributed denial of service attacks.

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Still, Devine adds that with so many healthcare applications moving to the cloud, and the BYOD phenomenon exploding at Riverside, he can see the usefulness of being able to route traffic based on an emerging healthcare data analysis standard such as Health Level-7, which provides a framework for the exchange, integration, sharing, and retrieval of electronic health information.

Terms of Fortinet's acquisition of Coyote Point weren't disclosed, but Fortinet said in a statement announcing the deal that it does not expect the transaction to be material to Fortinet's Q1 operating results.

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