Infoblox Aims to Fend Off BlueCat with New Products

Recently listed automated network control solutions provider Infoblox (NYSE:BLOX) is counting on the growth of “dynamic networks.” Infoblox believes that as businesses switch to automated network control demand for data centers that perform virtualization, cloud computing, software-as-a-service, and high-speed networking, support multiple business operations will grow. The company is riding on the wave of this trend. According to Gartner, Infoblox is a market leader in the segment with nearly 40% of the network control automation market.

Infoblox Misses Outlook Expectations
Infoblox reported a Q4 performance ahead of market expectations, but its projections fell short of Street’s projections. The company ended the quarter with revenues growing 14% over the year to $45.1 million. The Street was expecting revenues of $43.5 million. EPS of $0.01 was in line with market expectations.

By quarter, revenues from products and licenses remained flat at $24.2 million. Revenues from services grew 36% over the year to $20.9 million.

The company ended the year with revenues growing 27% to $169.2 million. EPS for the year grew from the $0.07 recorded a year ago to $0.12.

Infoblox projects break-even current quarter revenues of $45 million-$46.5 million. The market was expecting a break-even quarter on revenues of $44.7 million. The year’s outlook was less rosy. The company expect to end the year with revenues of $195-$202 million, with EPS of $0.04-$0.07. The market was looking for revenues of $194.8 million for the quarter and EPS of $0.11.

Competition for Infoblox Grows
Competition in the industry is heating up. The market is waiting for Microsoft Windows Server 8 upgrade which is expected soon. The Windows Server 8 is expected to come with features such as an enhanced in-built DDI (DNS, DHCP, and IPAM) support. Besides the bigger players, competition from smaller players is also increasing.

The company’s longtime rival, BlueCat Networks, has upped the ante. BlueCat Networks is a private player that offers IP address management solutions to both the government and the private sector. Last year, Infoblox and BlueCat were battling it out in a legal patent-related battle. The two settled the case and dismissed all litigation. BlueCat has now entered into a price war with Infoblox to try to get a bigger piece of the market.

Infoblox is responding to the competition with improved product offerings. Recently, it released a patch for the Infoblox NIOS operating system that will address the BIND vulnerability, which is the industry-standard protocol for performing DNS (Domain Name System) services. It also enabled its Trinzic suite of automated network control products to support common access card and personal identity verification smart cards so as to ensure that only authorized personnel are able to access and modify the settings on Infoblox systems.

The stock is trading at $20.12 with a market capitalization of $920.23 million. This is about 25% above the IPO price of $16.00. It touched a high of $24.15 earlier last week.