Blue Coat Grabs NetApp's NetCache

Blue Coat Systems today announced that it is buying one of its chief competitors, Network Appliance's NetCache product line, for $23.9 million in cash, plus 360,000 shares of Blue Coat stock.

The deal is another big one for Blue Coat, which secured $42 million in venture funding in order to make the buy. The company spent $60 million in January to buy security vendor Permeo, and the acquisition of NetCache plants Blue Coat squarely in a position to provide its combined proxy server/Web security/caching appliance to a wide range of enterprise customers. (See Blue Coat Puts On Acceleration.)

The deal is also a watershed for NetApp, which began as a caching/Web content delivery appliance maker but has focused mostly on the storage market in recent years. NetApp will continue to use some of the NetCache technology, which was part of its initial product warchest, in its FAS line of storage filer products.

"This divestiture allows us to sharpen our focus on data management solutions and services for the enterprise data center," said Jay Kidd, SVP and general manager of NetApp Emerging Products Group, in a prepared statement. "Over the long term, our NetCache customers will be better served working with a supplier who has a broader offering in the content delivery market and a strategic commitment to the Internet access, security, and proxy market."

Blue Coat is building its presence in that market with its proxy appliance, which combines traditional proxy server capabilities with caching, content filtering/delivery, and security management functions.