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Blue Coat Systems

Blue Coat Systems Inc., formerly CacheFlow, is a corporation headquartered in Su


nnyvale, California and owned by Symantec . It provides hardware, software, and
services designed for cybersecurity and network management.
Blue Coat was founded in 1996 as Cacheflow, a business focused on caching applia
nces for internet service providers. After several rounds of funding, it filed a
n initial public offering (IPO) in 1999. Slow adoption of caching technology led
to continued losses. In August 2002, the company changed its focus to internet
security appliances and was renamed Blue Coat Systems. The company returned to p
rivate ownership in 2011, when it was acquired by Thoma Cressey Bravo. It was th
en sold to Bain Capital in March 2015 and Symantec in 2016.
Blue Coat's products have received generally positive reviews in lab tests. They
are sometimes used by repressive regimes for censorship and surveillance.
Contents
1 Corporate history
1.1 CacheFlow
1.2 Blue Coat Systems
1.3 Acquisitions
1.4 2009 - 2015
1.5 Symantec
2 Products
2.1 Product history
2.1.1 CacheFlow
2.1.2 BlueCoat
3 Use by repressive regimes
4 References
5 Notes
6 External links
Corporate history
CacheFlow
Blue Coat was founded in March 1996 in Redmond, Washington by Mike Malcolm, Joe
Pruskowski and Doug Crow, under the name CacheFlow.[2] $1 million in seed capita
l was raised from angel investors, in order to develop caching appliances that w
ould increase how fast websites load by storing frequently accessed web data in
cache.[2][3][4][5]
Malcom hired former employees from Scaleable Software to create the CacheFlow op
erating system.[6] After completing product testing[3][4] that October, investor
s purchased 25 percent of the company with $2.8 million in venture funding. Anot
her $6 million was raised the following December and $8.7 million in March 1999.
[5] The company hired Brian Nesmith as President and Chief Executive Officer tha
t month.[2] Another $3.1 million in shares was purchased in November 1999 by Mar
c Andressen, whose reputation led to increased interest in the company's IPO.[5]
In mid-1998, the company made its first sales, earning just $809,000 over three
months,[3] and investors started pushing for an initial public offering (IPO).[3
][4][7] The company filed an IPO the following November.[5] CacheFlow was not ye
t profitable and the company itself said the market for caching appliances was s
till unproven.[8] Despite having $6 million in annual losses, the stock price ro
se from $24 a share to $126 in the first day of trading and $161 by October 2000
.[9][10] At the time, analysts were expecting a large market for caching applian
ces, due to widespread frustration with internet speeds.[6]
Blue Coat Systems

CacheFlow grew from $7 million in revenues in 1998, to $29 million in 1999 and $
97 million in 2001. However, it already had 21-35[a] percent of the total market
for its products and was still not profitable.[2] The company lost 97 percent o
f its value from October 2000 to March 2001 as the dot-com bubble came to an end
[6] and the company reported continued negative profits.[9][10] By 2002, several
competing internet caching companies had abandoned the market, due to slow adop
tion of caching technology[9] and most of CacheFlow's revenues were coming from
its IT security products.[9]
In August 2002, the company changed its name to Blue Coat Systems[b] and began f
ocusing on internet security appliances.[4][9] Its products were primarily used
to control, monitor and secure internet use by employees. For example, a company
could limit employee access to online gaming and video streaming, as well as sc
an attachments for viruses. According to The Record, "this may seem to create a
creepy virtual Big Brother hovering over employees' shoulders," but some compani
es have a small number of users hogging bandwidth, exposing the network to malic
ious software, or leaking internal documents.[6]
The shift in focus was followed by smaller losses and revenues at first[2][4] an
d eventually company growth.[11] Losses in 2002 after the rename were $247 milli
on, about half of the prior year's losses and by 2005 it was profitable for the
first time.[2] As of 2003, the company had 250 employees and $150 million in ann
ual revenue.[12]
Acquisitions
As Blue Coat System's financials improved, it was able to spend on acquiring IT
security companies.[2] The pace of acquisitions increased after Thoma Cressey Br
avo acquired Blue Coat in 2011,[12] and it acquired technologies needed to bette
r compete with FireEye.[11]
Announcement date
Company
Business
Deal size
Referenc
es
October 2000
Entera Digital content streaming
$440 million
[13]
June 2000
Springbank Networks
Internet devices
$180 million
[14][15]
October 2003
Ositis Software Inc.
Antivirus appliances
$1.36 million
[16][17]
July 2004
Cerberian
URL filtering $17.5 million [18][19]
January 2006
Permeo Technologies
End point security
$60 million
[20]
June 2006
NetCache[c]
Proxy caching $30 million
[21]
April 2008
Packeteer
WAN optimization
$268 million
[22][23]
February 2010 S7 Software Solutions IT research and development firm in Bang
alore $5.25 [24]
December 2012 Crossbeam Systems
X-Series of security appliances
Undisclosed
[25][26]
May 2013
Solera Networks
Big data security
Undisclosed
[27]
December 2013 Norman Shark
Anti malware firm
Undisclosed
[28]
June 2015
Perspecsys
Cloud security Undisclosed
[29]
November 2015 Elastica
Cloud security $280 million
[30]
2009 - 2015
In 2009, Blue Coat went through a restructuring that included layoffs of 280 of
its 1,500 employees and the closing of facilities in Latvia, New Jersey and the
Netherlands.[31] Revenues continued declining. The company was restructured in M
ay 2011 and the CEO was replaced that August.[32] Thoma Cressey Bravo acquired B
lue Coat in December 2011 for $1.3 billion and returned it to private ownership.
[33]

In March 2015, Forbes reported that Blue Coat had pressured security researcher
Raphal Rigo into canceling his talk at SyScan '15.[34] Although Raphal's talk did
not contain any information about vulnerabilities on the ProxySG platform, Blue
Coat still cited concerns that the talk was going to "provide information useful
to the ongoing security assessments of ProxySG by Blue Coat." The canceling of
the talk was met with harsh criticism by various prominent security researchers
and professionals alike who generally welcome technical information about variou
s security products that are widely used.[35]
In 2015, Blue Coat founded the Alliance Ecosystem of Endpoint Detection and Resp
onse (EDR) to share information about IT security threats across vendors and com
panies.[36] Its first channel program was started that March[37] and the Cloud R
eady Partner Program was announced the following April.[38] By 2015, the company
had $200 million in annual profits and about $600 million in revenues, a 50 per
cent increase from 2011.[39] That March, Bain Capital purchased Blue Coat from T
homa Bravo for $2.4 billion.[40] Bain indicated that it hoped to launch another
IPO[41][42] and several months later, anonymous sources said the company was loo
king for investment banks for that purpose.[43][44]
Symantec
In June 2016, Blue Coat abandoned its plans for an initial public offering and a
ccepted a $4.65 billion deal to sell to Symantec.[45] The announcement was for t
he largest acquisition Symantec has made in a decade and would make the combined
company the largest enterprise security business globally. Blue Coat CEO Greg C
lark was named CEO of Symantec, a position that was left empty since April.[46]
Products
According to Network World, Blue Coat has "a broad security portfolio including
hardware, software and services."[47] It's biggest business is in products that
filter web traffic on corporate networks.[48] As of 2011, one of Blue Coat's mos
t important products were Web gateways that scan internet traffic for security t
hreats, authenticate users and manage encrypted traffic.[49] Historically the co
mpany was best known for web gateway appliances and products to monitor and filt
er employee internet activity. It gained a broader product portfolio through a s
eries of acquisitions.[1] It now also has consumer products, such as parental co
ntrol software.[50]
Product history
CacheFlow
Blue Coat's (then called CacheFlow) first product was the CacheFlow 1000, releas
ed in January 1998. It cached website objects users were likely to use repeatedl
y, to increase load speed.[51] The CacheOS operating system was taken out of bet
a the following year[52] and updated again for multimedia content in 2000.[53] T
he CacheFlow family was expanded with the CacheFlow 100,[54] the CacheFlow 500 a
nd others. A competitive review of caching appliances in PC Magazine gave the Ca
cheFlow 500 Editor's Choice. The editor said it had "excellent performance", a "
plug-and-go" setup, and "good management tools.[55] PC Magazine said its "most n
oteworthy features" were its DNS caching and object pipelining techniques, which
allowed page data to be delivered in parallel, rather than sequential, streams.
[55]
CacheFlow's products were initially sold to internet service providers, but late
r products were intended for large companies.[5] In 2000, it introduced the Cach
eFlow Server Accelerator product family, which offloads content delivery tasks f
rom web servers.[56][57] Tests by Network World found the Server Accelerator 725
increased website load speed eight-fold.[57] The CacheFlow Client Accelerator 6
00 product family was also introduced that year. It was the company's first prod
uct family for corporate networks, caching Web or multimedia content directly on
the corporate network.[58] New features specifically for streaming media were i
ntroduced in 2001 under the name "cIQ".[2][59][60]

BlueCoat
In 2001, the company started adding IT security features.[61] By early 2002, Cac
heFlow was on the fifth version of its operating system. The Security Gateway 60
0/6000 Series was the company's newest product family.[62] It had a range of sec
urity features, such as authentication, internet use policies, virus scanning, c
ontent filtering, and bandwidth restrictions for streaming video applications. N
etwork Computing tested a beta appliance and gave it a positive review.[62] Late
r that year, the company was renamed to Blue Coat Systems to focus on security a
ppliances and simultaneously released the SG800. The appliance sat behind corpor
ate firewalls to filter website traffic for viruses, malware, worms and other ha
rmful software. It had a custom operating system called Security Gateway and pro
vided many of its security features through partners, like Symantec and Trend Mi
cro.[2][9][63] An InfoWorld review gave it an 8.4 out of 10.[64]
In 2003, three new products were introduced for small and medium-sized businesse
s (SMBs) with 50, 100 or 250 users in bundles with Websense[d] and Secure Comput
ing.[66] This was followed by a second generation of the ProxySG product family,
which added security features for instant messaging.[67][68] A review in eWeek
said the new ProxySG line was effective and easy to deploy, but the ongoing main
tenance fees were expensive.[68] In 2005 Blue Coat announced an anti-spyware app
liance called Spyware Interceptor[69] and the following year it announced upcomi
ng WAN optimization products.[70] This was followed by SSL-VPN security applianc
es to secure remote connections.[71]
A free web-tool, K9 Web Protection, that can monitor internet traffic, block cer
tain websites, identify phishing scams, was introduced in 2006. In a November 20
08 review, PC World gave it 4.25 out of 5 stars.[72] in 2009, it introduced a pl
ugin for PacketShaper to throttle applications like Spotify.[73] A review of the
PacketShaper 12000 in IT Pro gave it four out of five stars. The review said th
at "you won't find superior WAN traffic management anywhere else," but "the hard
ware platform could be more up to date considering the price."[74] Elastica's te
chnology was incorporated into Blue Coat products in 2014, with its Audit subscr
iption service being merged into the Blue Coat Appfeed in the ProxySG gateways.[
75]
In March 2015, Blue Coat integrated technologies from its acquisitions of Norman
Shark and Solera Networks to create a cloud-based product family called the Glo
bal Intelligence Network.[76]
Use by repressive regimes
Blue Coat devices are what's known as a "dual-use" technology, because they can
be used to defend corporate networks, or by governments to censor and monitor th
e public's internet traffic.[77] The appliances can see some types of encrypted
traffic,[78] block websites, or record when people visit them.[48]
In October 2011 the U.S. government was looking into claims made by Telecomix th
at the Syrian government is using Blue Coat's products in order to censor the in
ternet.[79][80][81] The hacktivist group released 54 GB of log data alleged to h
ave been taken from seven Blue Coat web gateway appliances that depict search te
rms, including "Israel" and "proxy", that were blocked in the country using the
appliances.[82] Blue Coat later acknowledged their systems were being used withi
n Syria, but assert the equipment was sold to intermediaries in Dubai, which the
y believed was destined for an Iraqi governmental agency, not the Syrian regime.
[83]
Despite the systems consistently sending "heartbeat" pings directly back to Blue
Coat, they claim to not monitor their logs to identify from which country an ap
pliance is communicating.[83] Blue Coat further announced they would halt provid
ing updates, support and other services for systems operating within Syria.[83]

In April 2013, the U.S. Department of Commerce s Bureau of Industry and Security (
BIS) announced a $2.8 million civil settlement with the Dubai reseller Computerl
inks FZCO for violations of the Export Administration Regulations (EAR) related
to the transfer to Syria of Blue Coat products.[78]
According to The Wall Street Journal, Blue Coat's devices are also used to block
the public from viewing certain websites in Bahrain, Qatar, and U.A.E., among o
thers.[48] By 2013, Citizen Lab had published three reports regarding BlueCoat d
evices being found in countries known for using technology to violate human righ
ts.[78] It identified 61 countries using Blue Coat devices, including those know
n for censoring and surveilling their citizens' internet activity, such as China
, Egypt, Russia and Venezuela.[77] According to The Washington Post, "it remains
unclear exactly how the technologies are being used, but experts say the tools
could empower repressive governments to spy on opponents."[78]
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Notes
25 percent of the overall market for caching and 35 percent of the caching appli
ance market specifically[2]
The new name was intended to evoke the image of a police officer or guard.[2][6]
Assets from NetApp
The Websense partnership was later at least partially dismantled and the two
vendors were "slinging mud at each other" in the VAR community.[65]
External links
Official website
Categories:
Companies based in Sunnyvale, CaliforniaServer applianceComputer security so
ftware companiesComputer security companiesComputer companies of the United Stat
esCompanies established in 1996Business ethicsInternational information technolo
gy consulting firms1996 establishments in CaliforniaContent-control softwareAmer
ican brands

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