Akamai Nets Netli for $180M

Flashes its cash for application delivery startup as HP makes a move into this space

February 6, 2007

3 Min Read
Network Computing logo

Managed service provider Akamai and HP both made forays into the application delivery space today, buying startups in an attempt to bolster their WAN optimization and monitoring stories. (See HP Acquires Bristol and Akamai Acquires Netli.)

Akamai acquired application acceleration specialist Netli, which has recently been pushing into the online backup and business continuity space.

HP, for its part, signed a deal to acquire Bristol Technology, which develops software for monitoring claims processing and inventory management applications. Neither firm revealed the financial details of their acquisitions.

That said, Akamai did confirm that it will acquire all of Netli's outstanding equity in exchange for approximately 3.2 million shares of its own stock. Based on current prices, this would make the deal worth around $180 million.

Increasingly, users are looking for ways to speed up and get better control over their enterprise applications -- hence Akamai and HP's decision to step into this space. (See Silver Peak Pockets $17M and Carlson Wagonlit.)Netli, for its part, uses a network of around 30 data centers dotted around the world to shift users' Web applications to remote sites. It started life back in 2000, offering its flagship NetLightning portal as a way for firms to deliver applications to off-site locations. Dell, Nokia, Kimberley-Clark, and Thomson Financial were amongst the early adopters of the product. (See Netli Scales Up .)

The bulk of the startup's 76-strong workforce are now expected to move over to Akamai. "We are growing this part of our business and we expect to maintain the majority of the Netli employees," says Akamai spokesman Jeff Young.

The initial signs are that Netli's management, including CEO Gary Messiana, will also be moving to Akamai. "They will be critical to our integration," says Young, although he added that final headcount details, along with product roadmaps, will not be revealed until after the closure of the deal later this quarter.

The startup has pulled in $47 million in funding, with its most recent round coming almost a year ago when it clinched an $18 million Series D round. (See Netli.) Since then, the company has moved into the European market and recently unveiled a managed service focused on digital rights management. (See Netli Expands and Netli Adds DRM.)

Netli has also expanded its offerings into backup and business continuity, opening a new data center in San Jose, Calif., where users can offload their files via the Internet. (See Netli Offers New Services and Netli Launches NetliOffload.)The Mountain View-Calif.-based startup has traditionally been a competitor of Akamai and Savvis in the application delivery space, although the firms recent announcements put it up against a slew of online backup vendors, including IBM, LiveVault, EVault, and HP.

HP, for its part, is looking to build on its recent $4.5 billion acquisition of Mercury Interactive with the Bristol Technology deal, citing the startup's ability to monitor application servers, middleware and mainframes. (See HP Waives Conditions and HP Finalizes Mercury Buy.)

At least one analyst feels that the startup fills a gap in HP's armory. "They are going to a depth that Mercury didn't," explains Marc Staimer of Dragon Slayer Consulting, adding that Bristol Technology monitors transactions in highly regulated industries such as insurance. "If you can monitor the transaction then you have the ability, ultimately, to tie it into security," he explains.

Bristol Technology has already racked up more than 1,000 customers, which include the likes of Deutsche Telekom, Honda and JP Morgan Chase.

The acquisition is expected to be completed within 30 days, at which point the Danbury-Conn.-based startup will become part of HP's Technology Solutions Group.— James Rogers, Senior Editor Byte and Switch

  • Akamai Technologies Inc. (Nasdaq: AKAM)

  • Deutsche Telekom AG (NYSE: DT)

  • EVault Inc.

  • Hewlett-Packard Co. (NYSE: HPQ)

  • LiveVault Corp.

  • Netli Inc.

  • Savvis Communications Corp.

Stay informed! Sign up to get expert advice and insight delivered direct to your inbox

You May Also Like

More Insights