Infoblox: Building Networks for the Data Explosion

Company stands to benefit from 4x increase in connected devices

   

While at the National Center for Data Mining, Stuart Bailey saw the opportunity to build next-generation data networks. So in 1999, he left academia to create a company, Infoblox.

But to grow the company, Bailey realized it was important to hire a top-notch CEO. This came to pass in 2004 when Robert Thomas joined the company. Before this, he was the CEO of NetScreen, which was sold to Juniper Networks (NASDAQ:JNPR) that same year.

Things have worked out well for Thomas and Bailey, and now Infoblox is ready for a public offering. The company filed last week for an IPO of up to $125 million, and the lead underwriters on the deal include Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS).

Infoblox develops sophisticated appliances that automate dynamic data networks and data centers. It helps with things like IP address management, device configuration, compliance, network discovery, policy implementation, security and monitoring.

To sell its products, Infoblox uses mostly channel partners, such as distributors, integrators and value-added resellers. In turn, the company has sold appliances to more than 5,000 customers, including Dow big boys like Boeing (NYSE:BA), Caterpillar (NYSE:CAT), IBM (NYSE:IBM) and Johnson & Johnson (NYSE:JNJ).

In the fiscal year ended July 31, 2011, Infoblox posted revenues of $132.8 million, up 30% over the prior year, though the company reported a $5.3 million loss. But keep in mind that the company has been spending aggressively on marketing and research & development.

The growth opportunity might actually be in the early stages, though. One major driver is the surge in connected devices, such as smartphones, tablets, laptops, virtual machines and even surveillance systems. According to IMS Research, the number of connected devices is predicted to increase by four-fold to 22 billion by 2020.

Some of the other key trends include cloud computing as well as virtualization, which will put tremendous pressure on legacy networks. Thus, automation of core functions will be critical. And when it comes to this technology, Infoblox is one of the market leaders.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/ipo-playbook/infoblox-ipo-building-networks-for-the-data-explosion/.

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