Cisco Makes App Acceleration Buy

FineGround, a five-year-old, 42-person company based in Campbell, Calif., that does only 10 percent of its U.S. business through the channel, makes data center appliances aimed at accelerating secure Web-based applications. FineGround also has wide-area file services (WAFS) appliances that accelerate the secure access of data over a WAN.

When the deal closes, which is expected by the end of July, Cisco said it is planning to sell the FineGround appliances through its channel. But the San Jose, Calif.-based company has not yet decided whether it will reprice the FineGround appliances, which start at $50,000, or how it will resolve a product conflict that pits the FineGround WAFS product against a similar Cisco offering, said Janey Hoe, director of marketing for Cisco's Security Technology Group.

Hoe said the FineGround products provide Cisco VARs with a more robust data center offering. "This is a very complementary product set that helps them provide an even more competitive solution with unique capabilities for application acceleration," she said.

Mont Phelps, CEO of Netivity Solutions, a Waltham, Mass.-based Cisco partner, applauded the deal. "Application-level security is a big issue. Security is something best viewed in layers," he said. "You can't just put a big fence around the perimeter and expect everything to be secure. A large percentage of vulnerabilities come from the inside of the network."

The deal comes with the race for providing secure Web application optimization heating up.

In April, for example, Cisco rival Juniper Networks, Sunnyvale, Calif., acquired Peribit Networks, a maker of WAN optimization appliances, and Redline Networks, a maker of application acceleration devices, for a combined cost of $469 million.

Besides Juniper, Cisco is likely to face competition from Brocade Communications, San Jose, which recently invested $7.5 million in WAFS technology developer Tacit Networks.

Joseph F. Kovar contributed to this story.