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Barracuda Plans Broader Line Of Appliances

Barracuda Networks was founded five years ago as an anti-spam specialist. The company grew last year through acquisition and by selling appliances outside its sweet spot. Look for Barracuda to expand its line further in 2008 and push deeper into international markets.

Barracuda has already transitioned from being a one-trick, spam-blocking pony to selling a variety of security appliances. The next step, says president and CEO Dean Drako, is to offer an even wider range of appliances, including those suppport IT tasks beyond security. Some possible examples: Internet access, bandwidth optimization, fax archiving, disk storage, backup, device monitoring, anti-spyware, and packet filtering.

Its flagship products are its spam firewall and Web filter. Barracuda also sells an IM firewall, load balancer, message archiver, Web application firewall, and application gateway. While Barracuda's products ship as appliances, Drako says Barracuda could almost be described as a software-as-a-services company, given the frequent updates that are pushed out to its hardware.

Last July, Barracuda acquired NetContinuum, a provider of application delivery controllers, which combine Web app security and traffic management. Barracuda plans to push NetContinuum's products down and out--to small and mid-size businesses and into overseas markets.

More acquisitions are likely. Drako won't say whether Barracuda, a private company, plans to go public this year, but he acknowledges that capital fuels growth and an IPO is an obvious way to raise money. If and when the company's strategy calls for that kind of cash infusion, he says, "We will consider very strongly the public markets." Sequoia Capital is an investor in Barracuda.

Make no mistake, Barracuda's still got plenty of spam fighting to do. According to the company's end-of-year spam report, spam accounted for 90% to 95% of all e-mail in 2007, an increase from the 85% to 90% range in 2006. Says Drako, "We've got our hands very full."

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