Consolidating Caching Players

In a move that signals further consolidation in the small but lucrative dynamic caching software segment, WARP Technology Holdings has purchased iMimic Networking in a stock deal worth about $7 million.

As enterprise networks move to distributed applications across wider enterprise networks, the two companies are essentially bulking up in order to offer a wider range of sophisticated caching technology.

Analysts that follow the sector say the deal will help the New York-based WARP expand its range of dynamic caching products, which help enterprises streamline their network capacity by using caching technology that makes applications less CPU or bandwidth-intensive.

In this case, Houston-based iMimic Networking brings to the WARP product line a range of static caching technologies that can run on open platforms, including Linux and FreeBSD. The open-source compatibility will enable the company to offer its static caching and content prepositioning products at lower prices.

WARP also said iMimic’s technology will allow the integration of other value added services, such as content filtering via its open API .

“We see great synergy in the powerful combination of WARP and iMimic,” said Karl Douglas, CEO of WARP Technology Holdings. “This intended acquisition reinforces our commitment to strengthening support for the OEM and reseller channels, and will extend the support to cover additional WARP products, such as our SpiderSoftware web acceleration line.” (WARP purchased fellow dynamic caching software company SpiderSoftware in 2002.)

The acquisition comes as WARP works to build out new capabilities its Global Transaction Enabled Network (GTEN), its framework for distributed application acceleration. A key component of that network is its latest 2063v line of edge appliances, a pre-processor Application Delivery Network (ADN) edge appliance with the capability to support caching of both static and dynamic content.

It also provides partial page caching at the edge of a network, distribution of cached content for serving content at edge nodes, SSL acceleration, compression of outbound content as well as TCP-IP session offloading.

Peter Christy of NetsEdge Research Group,
which specializes in Internet infrastructure issues, said since bigger players such as Inktomi (whose search business was recently purchased by Yahoo ) abandoned the caching business a year or so ago, smaller players such as WARP, and others such as Stratacache are building substantial businesses.

“The iMimic people have valuable technology,” he added. “Once the dot-com bubble burst, a lot of companies survived by staying low scale, and by delivering a product that had a clear business value.”

While some aspects of caching, such as load balances and routing, are seen as commodities, he said caching is still a good technology.

“It’s not a question of whether it’s useful, but more of a question of the price point for who buys it,” he said. In addition, “application-focused companies don’t always understand the issues involved with the transmission of those applications over a network,” Christy added, referring to the common complaint among IT workers that many enterprise applications are bandwidth-intensive.

Michael Hoch, analyst with Aberdeen Group who also covers dynamic caching companies, said the sector is breaking out into specific services. WARP, for example, is going with a software approach, with some hardware/sofware products that can be installed at edge nodes to help companies manage content loads across their networks.

Others, such as Akamai , he added, are taking a service approach by
offering network hosting services that specialize in edge computing.

With its recent acquisitions, WARP now has products that can work with Windows, as well as Sun and Unix-based operating systems in big data centers. And it’s expected to try to work more closely with BEA and IBM, as it looks for placement near Web servers in large server farms, he said.

“We’re also seeing retail operations looking strongly at dynamic caching technology, as they try to deliver point-of-sale and related numbers-collecting applications to a large number of stores across a large geographic area,” he said.

Other sectors the companies are eyeing include portal-based applications, such as human resources, supply chain and customer relationship management applications.

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