Bluesocket, maker of appliances that control and secure wireless LAN access points, has announced $10 million in additional venture capital funding, which it is likely to use to develop security policy and intrusion prevention features. As it sells heavily into Cisco accounts, it will have to take account that Cisco now has a rival product, having bought Airespace, and most likely precipitated a shake-out
Bluesocket, which recently launched a small office appliance, is one of the longest-established in the wireless LAN industry. Having launched in 1999, it claims to have 1,000 customers and has now amassed $42 million in four rounds of funding. Its products are highly regarded for ease of use (read our reviews of the Bluesocket WG-2100 and Bluesecure IDS security product).
One reason that the gateway vendor needs the funds is that despite the proliferation of WLANs, making money in the business isn't easy (see WLAN switches - the numbers game). Weaker companies have begun closing down or getting bought out, while established vendors such as Cisco Systems (a Bluesocket partner) and Nortel Networks are winning more than their fair share of customers.
Privately held Bluesocket won't disclose financial details, but says it doesn't expect to be profitable until late next year or the year after even though revenue is more than doubling year over year. Bluesocket cites education and healthcare as being among the most active vertical markets for WLANs, with government installations picking up.
Bluesocket CEO Ralph Calistri, who joined the company in August, says the new funds will enable the company to expand its product line as well as its sales and marketing efforts. Bluesocket will look, for example, to increase its field organisation from roughly 30 people to about 40.
"The market is growing real fast," says Calistri, previously head of web services management company Flamenco Networks. "Unless we have the additional money to expand both technically and in the field we won't be able to (take advantage of) expansion of the market."
While Calistri says the market still awaits the emergence of many giant corporatewide WLANs, he says Bluesocket's systems integration organisation is seeing RFPs that indicate such networks might not be far off. These RFPs show plans for Fortune 100 company rollouts that span thousands of remote offices, he says. Customers are still challenged to figure out who the players are given the dozens of vendors in the market, Calistri adds.
The company is tightlipped about product plans, but pledges to reveal new developments later this quarter and early in the second quarter. Dave Danielson, the company's vice president of marketing, says intrusion prevention technology is among the additions customers should expect. He also says the company's product line will be expanded to do more in the way of using roles and policies to keep the bad guys out and let the good guys in.
"The trust boundary in wireless is expanding to include not just authenticating users and ensuring what people are doing and where they are going, but it is also growing to include where they are coming from, what's the layout of the RF airwaves, what's the intrusion detection system," he says.
Current users are watching to see what features emerge from all the WLAN players. Jinx Walton, director of computing services and systems development at the University of Pittsburgh, says the school relies on Bluesocket devices to handle authentication and authorisation for its wireless networks and even wired networks in some departments. The school is keeping an eye on competing products, such as WLAN switches, but is waiting to see how things shake out as vendors scramble to add features.
While happy with the Bluesocket products, Walton says his wish list includes more powerful and scalable devices. "It would also be useful to have an integrated solution for virus and security patch level scanning," he adds.
Bluesocket's latest funding round comes courtesy of existing investors, including Ascent Venture Partners, Boulder Ventures, Ironside Ventures, Menlo Ventures, Ridgewood Capital and Vesbridge Partners.
Separately, WLAN security and management software vendor Roving Planet last week announced it has secured $6 million in second round funding, bringing its total to $19.5 million. StarVest Partners led the round.
The money will be used to accelerate software development as well as expand sales and marketing efforts, the vendor says.
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