Arbor Networks To Merge With Ellacoya

The move, which execs say they hope to close at the end of January, will boost network security and service offerings to Internet service providers. However, terms of the deal were not disclosed.

The deal expands Arbor's portfolio from primarily security offerings toward a much broader range of traffic and service management products and services. The company is aiming to enhance its security monitoring and reporting capabilities with Ellacoya's platform of deep packet inspection technologies.

Based in Lexington, Mass, Arbor Networks specializes in security solutions that protect against threats such as DDoS attacks, botnets and worms in addition to network traffic and routing instability.

Covering another angle of the security spectrum, Ellacoya Networks, based in Merrimack, N.H., provides deep packet inspection (DPI) solutions deployed at the broadband edge in global service provider networks. In addition, Ellacoya also delivers IPTV, digital video and on-demand quality-assured broadband services.

Execs maintain that putting both together will enable solution providers to detect and mitigate the full range of network-based threats. The combination will also improve network performance while enabling service providers to deliver a wide spectrum of IP-based business lines such as wireless, wireline, IPTV and VoIP solutions, they say. Once combined, both companies will still retain their separate product lines.

"With the addition of the Ellacoya technology and customer base, Arbor Networks will be in a unique position to deliver both broad and deep visibility to protect and manage networks worldwide. We believe that customers will realize enormous value from this strategic and best-in-class combination," said Jack Boyle, chief executive officer of Arbor Networks in a written statement.

In acquiring Ellacoya, Arbor execs say that they are fulfilling a company mission by implementing a three-fold growth strategy that includes international market expansion, organic revenue growth, and the acquisition of new products and technologies that augment their capabilities.

Arbor execs say that the acquisition positions the company to take advantage of a significant market opportunity as increased importance is placed on traffic and service management to securely deliver IP services.

Arbor forecasts that the combination of its traditional infrastructure security market with service control sales and DPI markets will create a $750 million market opportunity this year, which it hopes to grow to $1.5 billion by 2010.