F5 Networks Acquires Assets And IP Of Crescendo Networks

Application delivery network provider F5 Networks has acquired intellectual property (IP) and certain technology assets from Crescendo Networks. Chief among the assets is a number of Crescendo Networks engineers at its headquarters in Tel Aviv, Israel. The engineers will join F5 engineers already based in that city.

A news release quoted an F5 executive as saying that Crescendo’s technology provides Layer 7 field-programmable gate array (FPGA) capabilities for hardware and security solutions. With the acquisition, F5 says, the company will be able to further strengthen its products' ability to address the exponential growth of Internet traffic and the rising number of security threats to software applications.

"Layer 7 is at the application layer," explains Cindy Borovick, research VP for data center networks at IDC. "What F5 found in Crescendo was that there was some particular IP related to accelerating different types of traffic in hardware and about where you could offload from the [central processing unit] CPU and do some traffic processing in the hardware."

The FPGA is an integrated logic chip that can be programmed by the operator. Once the design is set, these hardware chips can be produced in bulk for faster performance. While Crescendo has won "a number of industry awards for its innovative products," F5 says, the company was unable to make a go of it in the market.

F5 says the acquisition was made "through a liquidation process in Israel" of Crescendo, which was founded in 2002. An F5 spokesperson explained by e-mail that liquidation in Israel is a court-ordered dissolution of an insolvent company. It is not a liquidation as the term is used in U.S. Bankruptcy Court because in Israel only individuals, not companies, can declare bankruptcy. Terms of the acquisition were not disclosed.

"They were never really able to capitalize on the market opportunity," says IDC’s Borovick of Crescendo. "They had a number of fits and starts in terms of marketing, and they were never able to capture the market opportunity in North America." The market has also consolidated with F5 as the largest supplier, Borovick adds.

F5 Networks was placed in the vaunted upper-right quadrant of market leaders in a November 2010 report ranking application delivery controller vendors from the research firm Gartner. Gartner put F5’s market share at 47%, highest of all the vendors.

Also ranked highly with F5 as market leaders were Citrix Systems and Radware. Crescendo was placed in the lower-left quadrant of niche players and smaller firms. The Gartner study noted that while Crescendo had built an account base of Web 2.0 sites and other high-traffic Web sites, "Crescendo has achieved limited market and brand visibility in the enterprise."

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