A10 says Appcito buy will separate it from F5 and Citrix
Application deliver controller vendor says traditional ADC market has become 'stagnant' and that inaugural acquisition since IPO will help it transition its customers to the cloud
The traditional application delivery controller (ADC) market is "stagnant", A10 Networks has claimed as it bets big on cloud-based ADC with its first acquisition as a public company.
A10 has acquired Appcito, a San Jose-based start-up whose SaaS-based, multi-cloud ADC solutions it claims will help it transition its customers to the cloud more quickly. It has claimed the process of on-boarding partners to the newly acquired technology will be "speedy".
"Our vision, which is where we differ from F5 and others, is to bridge the gap between on-premise and cloud."
Referencing the recently published Q3 results of ADC leader F5 Networks, which showed revenues rising three per cent annually, Ron Symons, regional director, EMEA West at A10, said the traditional ADC market had become "somewhat stagnant".
"We want to move away from proprietary hardware, which is where we've been and where we are," he told CRN.
"Our vision, which is where we differ from F5 and others, is to bridge the gap between on-premise and cloud and be with the customer every step of the way. This acquisition accelerates A10's time to market on its cloud native solutions as this market grows, and we think there will be a time-to-market advantage for us by acquiring this technology rather than trying to write it ourselves."
Despite growing at a faster pace than F5, A10 is about a tenth the size of its larger rival, which bosses the ADC market alongside fellow market silverback Citrix.
According to IDC, the ADC market will grow 4.9 per cent annually between 2015 and 2020. However, ADCs in the software/virtual form factor will increase at a rate of 35 per cent, the analyst predicts. Growth across the market will be driven by cloud, SDN, NFV [network functions virtualisation], DevOps and microservices and vendors that align their strategies with these trends are more likely to expand more quickly than the market, the analyst added.
"The speed of cloud adoption has driven our acquisition of this company," Symons said.
"If [customers] want to build 100 per cent on premise, they have the tools and hardware to do it. If they want to go cloud, then we have the virtualisation there and with Appcito we can also provide the orchestration and automation that's needed there. We want to bridge the gap between the two. I don't think it's going to change 100 per cent any time soon, but the market is certainly going there."
Appcito's 30 engineers will all move across to A10 and its founder and CEO, Kamal Anand, will head up a new cloud business unit within the vendor.
Joint offerings launched later this year will include a cloud services controller for centralised policy management and orchestration, elastic application traffic management capabilities integrated with DevOps processes, deep per-application visibility and analytics, and support for microservices and container-based applications.
"They'll bring automation, orchestration and some very in-depth analytical reporting software to our offering, which will allow us to transition customers to the cloud more quickly," Symons said.
"We're going to announce the product offerings starting in Q3 and Q4 and will make a fast start with this. We will be engaging with the channel and evaluating what the right channel partners and here in the UK we will be talking to [sole UK distributor] Cloud Distribution this week - it will be a pretty speedy process."
A10, which recently underwent a cull of its UK partners, saw net losses narrow from $9.1m to $4.1m year on year in its most recent quarter on revenues that rose 22 per cent to $53.8m. Its IPO was in 2014.
F5, in contrast, posted a net profit of $91.8m on revenues of $496.5m in its most recent quarter.
"The rate of losses is coming down," Symons said. "Our stated plan is to be profitable this year and this acquisition shouldn't take us off this course."
David Silsby, sales and marketing director at A10 partner Network Utilities, welcomed news of the purchase, saying Appcito's technology would help tackle security concerns traditionally harboured by UK firms pondering a move to the cloud.
"People are looking for technology that offers them the ability to sleep at night knowing as they migrate appcliations and services to the cloud they have the protection they would expect in an on-premise environment," he said. "That's what this new acquisition does - it gives A10 the ability to offer ADC across on-premise, cloud and hybrid, and to secure that environment as well."