The appetite for systems that allow distributed businesses to share their data faster is driving rapid growth in the wide area network (WAN) acceleration market – and that is attracting some big name vendors to the space.

That places the smaller technology-driven vendors under increasing pressure and in April 2008, something gave: Packeteer, often credited as being the originator of the WAN acceleration industry, was acquired by rival Blue Coat Systems for $268 million.

The acquisition shortly follows a failed buy-out by private equity firm Elliott Associates LP. Dismayed by the fact that Packeteer had failed to turn a profit in 2007, despite the fact that the market it initiated is – according to some estimates – growing by 65% annually, the firm put in an offer for $200 million but was knocked back by the board of directors.

Blue Coat’s more generous bid was accepted, and brings the company not only 10,000 new customers – including Ernst&Young and Cancer Research UK - but also possession of Packeteer’s popular Packet Shaper application acceleration product set. Blue Coat CEO Brian Nesmith promised customers that Packet Shaper would be ‘reinvigorated’ by its new owners.

The WAN acceleration market is predicted to be worth $1.2 billion in 2010 by market researcher Infonetics – action that has attracted the likes of Cisco, Juniper Networks and Citrix to the sector. Blue Coat’s acquisition has bought it some time to capitalise on the booming industry – perhaps before it is acquired itself.

Meanwhile, IBM continued to exercise its gravitational pull on the IT industry in April, this time in the storage technology market. It agreed to acquire inline data de-duplication technology provider Diligent for an undisclosed sum.

Storage-level de-duplication, which allows organisations to reduce the amount of data they need to store, is quietly becoming a key technology as companies seek to drive efficiency from existing resources.

Israel-based Diligent, which will be rolled into IBM’s storage division, makes not only de-duplication technology but more importantly the supplementary software to integrate it in virtualised storage environments. The company was recently dubbed a ‘Cool Vendor’ in the data protection market by analyst company Gartner.

Further reading

Wide area acceleration Wide area networks are being clogged with data traffic. But a new wave of tools is offering options for accelerating, optimising and prioritising the flow

File sharing beyond the speed of light Riverbed ups the pace