Blue Coat Systems

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Blue Coat Systems Inc.
Privately held company
Industry Network Security
Predecessor CacheFlow
Founded 1996
Headquarters Sunnyvale, California, United States
Key people
Greg Clark (CEO)
Michael Fey,
(President and COO)[1]
Products ProxySG, Advance Threat Protection (ATP) System, SSL Visibility Appliance, MACH5, K9 Web Protection, PacketShaper, CacheFlow
Revenue IncreaseUS$496M (FY 2010)[2]
IncreaseUS$39.3M (FY 2010)[2]
IncreaseUS$42.9M (FY 2010)[2]
Total assets IncreaseUS$696M (FY 2010)[3]
Total equity IncreaseUS$386M (FY 2010)[3]
Number of employees
more than 1,400 (as of 2014)[4]
Parent Thoma Bravo

Blue Coat Systems Inc., formerly CacheFlow, based in Sunnyvale, California, United States is a provider of security and networking solutions. In December 2011, Blue Coat was acquired by private equity investment firm Thoma Bravo for $1.3 billion and began operating as a privately held company.[5] In March 2015, Thoma Bravo sold Blue Coat to private equity firm Bain Capital.[6]


Blue Coat Systems was founded in 1996 as CacheFlow, with the original headquarters in Redmond, Washington. In 1999, Rick Kimball and Jay Hoag of Technology Crossover Ventures invested in CacheFlow.[7]

Blue Coat provides products to more than 15,000 customers worldwide. It identifies itself as a business assurance technology specialist.[8] Blue Coat products are primarily used by enterprises, schools, hospitals, governments, and public agencies to block malware and malicious threats, control access to applications and content in the workplace, surveillance, censorship, and improve the performance of network applications.[9] Usually used in conjunction with a firewall rather than in lieu of same.

On December 9, 2011, Blue Coat agreed to be acquired by Thoma Bravo for $1.3 billion. With the closing of the transaction, Blue Coat stock was delisted from NASDAQ and it was no longer a publicly traded company.[10][11] On February 6, 2015 the Wall Street Journal reported that an attempt to sell Blue Coat to defense contractor Raytheon had failed, and Thoma Bravo was restarting the sales process.[12] On March 10, 2015, private equity firm Thoma Bravo sold Blue Coat to private equity firm Bain Capital for $2.4 billion.[6]

In July 2015 Blue Coat was exposed for using the IAA's Family Friendly Filter accreditation logo on its K9 website, implying it was accredited with the IAA, when fact Blue Coat had not submitted K9 for reaccreditation for some time and was no longer accredited.


  • Security[13][14]
    • ProxySG, multi-part enterprise software and hardware appliance, designed for companies with a large number of computers
    • Web Security Service, cloud-based web security
    • Mobile Device Security Service, cloud-based web security for mobile devices and applications
    • Content Analysis System, security appliance with malware scanning and application whitelisting for the web gateway
    • Malware Analysis Appliance, sandboxing appliance for detection and analysis of unknown files and downloads
    • SSL Visibility Appliance, SSL decryption to identify hidden threats
    • Security Analytics Platform, full packet capture and analysis to identify and respond to threats on the network
    • X-Series, Scalable network security platform that supports virtualized third-party security applications
  • WAN Optimization[13][14]
    • MACH5, accelerate internal and external applications for distributed employees
    • PacketShaper, Content-aware visibility and control over network and applications
  • Personal Security[13][14]
    • K9 Web Protection, free to use protection for use as a parental control and to filter Internet browsing. This however has a loophole in that it depends in the quality of the staff analyzing web content and correctly categorizing it. For instance it allows access to a full porn movie archive because it is categorized as a streaming service and thus access is not barred to those who have blocked pornography. Users can report sites that they consider are wrongly categorized but when the web content analyst three times in a week categorizes a porn archive as web streaming we know there is something wrong with Blue Coat. Alluc website contains the content.
  • Service Provider Caching[13][14]
    • CacheFlow, caching solutions for carriers customers


In 2000, Blue Coat acquired Entera for its streaming technologies. The deal was valued at $170 million.[15]

Following its entry into the security market, Blue Coat acquired several companies to build additional functionality into its product portfolio. From 2003-2006, Blue Coat acquired three companies: Anti-virus appliance vendor Ositis Software, Inc. for $7.1 million,[16] URL filtering vendor Cerberian for $17.5 million[17] and Permeo Technologies for its SSL (Secure Sockets Layer) VPN appliance.[18]

As Blue Coat moved into the WAN optimization market, it shifted its acquisition focus to companies with caching and performance technologies. In 2006, Blue Coat acquired the NetCache business from NetApp.[19][20] In 2008, Blue Coat acquired Packeteer, a bandwidth management company, for $268 million.[21][22][23] In 2010, Blue Coat acquired S7 Software Solutions, a provider of software migration products and services.[24]

Beginning in 2012, Blue Coat refocused its acquisitions on expanding its product portfolio into adjacent security markets. In December 2012, Blue Coat acquired Crossbeam Systems, maker of a scalable network security platform that can virtualize network security applications from third-party security software vendors (including McAfee, Sourcefire, Check Point, and Imperva).[25] In May 2013, Blue Coat acquired SSL technology from Netronome.[26] Also in May, Blue Coat acquired Solera Networks, a maker of security analytics products that help businesses detect and resolve threats already on the network.[27]

In December 2013, Blue Coat acquired Oslo based Norman Shark, a provider of threat discovery and malware analysis solutions for enterprises, service providers and government.[28][29]


In October 2011 it was reported that the U.S. government was looking into claims made by Telecomix that the Syrian government is using the company's products in order to restrict Internet access.[30][31][32] The hacktivist group released 54 GB of log data alleged to have been taken from seven Blue Coat web gateway appliances that depict search terms, including "Israel" and "proxy", that were blocked in the country using the appliances.[33]

On March 12, 2013, Reporters Without Borders named Blue Coat Systems as one of five "Corporate Enemies of the Internet" for selling products that have been or are being used by governments to violate human rights and freedom of information. Blue Coat has consistently denied these claims, asserting that it respects internationally recognized rights to privacy and freedom of expression, and does not condone any government’s use of its products to abuse Internet privacy or freedom of expression.[34]

In April 2013, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced a $2.8 million civil settlement with Computerlinks FZCO for violations of the Export Administration Regulations (EAR) related to the transfer to Syria of Blue Coat products. The penalty was the maximum allowed. According to the BIS, Computerlinks FZCO provided Blue Coat with false end user information. Computerlinks FZCO knew that the items were destined for end users in Syria but stated that the end users for the items were the Iraqi Ministry of Telecom or the Afghan Internet service provider Liwalnet.[35] On July 8, 2013, The Washington Post reported on a Citizen Lab study, accusing the governments of Sudan and Iran of misusing Blue Coat products.[36]

In August 2014, Blue Coat introduced policy and process changes to further mitigate the risk of third party product misuse and diversion of its products, providing enhanced end-user due diligence processes for orders that pose a higher risk of product misuse or diversion and updated end-user license agreements to reflect its new policies and governance.[37]

In September 2014, Buzzfeed reported that Egypt has contracted with an Egyptian-based company and has begun monitoring online communications within Egypt. The article mistakenly referred to the Egyptian company as a 'sister company' of Blue Coat.[38] Its main argument that Blue Coat products are being misused by the Egyptian company has since been proven false. Buzzfeed reported the next day on a statement issued by Blue Coat, saying "See Egypt is a Blue Coat reseller, but is not otherwise affiliated with Blue Coat. See Egypt has assured us that they have not bid or resold Blue Coat products to the Egyptian government for any social network monitoring operation... Blue Coat sells its products to end users through more than 2,000 resellers worldwide. We require our resellers to adhere to the same legal requirements and ethical standards to which we hold ourselves."[39]

In March 2015, Forbes reported that Blue Coat had pressured a security researcher, Raphaël Rigo, into canceling his talk at SyScan '15.[40] Although Raphaël'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 various security products that are widely used.[41][42][43]

See also[edit]


Blue Coat System's main competitors include Aryaka, Cisco, F5 Networks, Citrix, Ipanema Technologies, Infineta Systems, Radware, Sangfor Technologies, Riverbed Technology and Zscaler.


  1. ^
  2. ^ a b c Blue Coat Systems (BCSI) annual SEC income statement filing via Wikinvest.
  3. ^ a b Blue Coat Systems (BCSI) annual SEC balance sheet filing via Wikinvest.
  4. ^ "CrunchBase profile". Retrieved 8 April 2014. 
  5. ^ "Thoma Bravo Completes $1.3 Billion Acquisition of Blue Coat Systems". Thoma Bravo press release. February 15, 2012. 
  6. ^ a b Reuters News Story. March 10, 2015 [ title= Bain to buy Blue Coat for about $2.4 billion title= Bain to buy Blue Coat for about $2.4 billion].  Missing or empty |title= (help)
  7. ^ "Interviews - Jay Hoag And Rick Kimball | Dot Con | FRONTLINE | PBS". Retrieved 2015-05-16. 
  8. ^ Enzer, Georgina (June 10, 2013). "Blue Coat unveils new strategy". 
  9. ^ Murphy, David (February 15, 2013). "Enabling a Safe and Productive Internet". Blue Coat Company Blog. 
  10. ^ "Blue Coat Agrees to be Acquired by Private Equity Firm Thoma Bravo". December 9, 2011. 
  11. ^ "Blue Coat to Operate as a Privately Held Company and Aggressively Advance its Leadership in Web Security and WAN Optimization". February 15, 2012. 
  12. ^ "Thoma Bravo Renews Sales Process for Security Software Company Blue Coat". February 6, 2015. 
  13. ^ a b c d "Company Overview of Blue Coat Systems Inc.", Bloomberg Businessweek. Retrieved 13 February 2014.
  14. ^ a b c d "Business Assurance Technology Products", Blue Coat Systems. Retrieved 13 February 2014.
  15. ^ John Leyden (December 18, 2000). "Entera buyout complete". San Francisco Business Times. 
  16. ^ "Blue Coat buys Ositis". The Register. October 29, 2003. 
  17. ^ Dan Ilet (July 19, 2004). "Blue Coat buys Cerberian". SC Magazine. 
  18. ^ Paul Roberts (January 3, 2006). "Blue Coat to Acquire Security Company Permeo for $60M". eWeek. 
  19. ^ Chris Williams (June 23, 2006). "NetApp flogs NetCache to Blue Coat". The Register. 
  20. ^ Rebecca Munro (October 19, 2006). "Blue Coat looks for partners to help NetCache transition". ARNnet. 
  21. ^ Greene, Tim (April 21, 2008). "Blue Coat to buy Packeteer Traffic shaping, application visibility, customer list are the reasons". Network World. Retrieved December 27, 2009. 
  22. ^ Lawson, Stephen (April 21, 2008). "Blue Coat to Acquire Packeteer for $268 Million". PC World. Retrieved December 27, 2009. 
  23. ^ "Blue Coat Completes Acquisition of Packeteer", June 9, 2008
  24. ^ "Blue Coat Systems acquires S7 Software Solutions". Reuters. February 12, 2010. Retrieved March 29, 2011. 
  25. ^ Bill Brenner (December 18, 2012). "Blue Coat acquires Crossbeam Systems". CSO. 
  26. ^ "Blue Coat Acquires Netronome SSL Technology to Extend Leadership in Enterprise Security". Press Release (Blue Coat Systems). May 9, 2013. Retrieved July 23, 2013. 
  27. ^ "Blue Coat to Acquire Solera Networks", Press Release, Blue Coat Systems, May 22, 2013. Retrieved September 4, 2013.
  28. ^ "Blue Coat Acquires Norman Shark", Press Release, Blue Coat Systems, December 18, 2013. Retrieved January 5, 2014.
  29. ^ "Blue Coast acquires anti-malware firm Norman Shark", Ellen Messmer, Network World, December 18, 2013. Retrieved January 5, 2014.
  30. ^ "US probes Syria's use of Internet blocking equipment". BBC. October 24, 2010. Retrieved October 25, 2011. 
  31. ^ "Syria using American software to censor Internet, experts say". The Washington Post. October 22, 2010. Retrieved October 25, 2011. 
  32. ^ Hopkins, Curt (May 29, 2013). "U.S. company allegedly caught aiding Syria and Iran in censorship efforts". The Daily Dot. Retrieved June 2, 2013. 
  33. ^ "Blue Coat denies sale to Syrian censors". Information age. October 25, 2010. Retrieved October 25, 2011. 
  34. ^
  35. ^ "Bureau of Industry and Security Announces $2.8 Million Civil Settlement with Computerlinks FZCO for Charges Related to Unlawful Exporting of Technology to Syria". Bureau of Industry and Security Press Release. April 25, 2013. 
  36. ^ Ellen Nakashima, "Web monitoring devices made by U.S. firm Blue Coat detected in Iran, Sudan", Washington Post, 8 July 2013
  37. ^ "Blue Coat Introduces Public Internet Access Policy". Blue Coat Systems website. August 11, 2014. 
  38. ^ "EXCLUSIVE: Egypt Begins Surveillance Of Facebook, Twitter, And Skype On Unprecedented Scale". BuzzFeed, Inc. September 17, 2014. 
  39. ^
  40. ^ "Hackers Slam Blue Coat Claiming It 'Pressured Security Researcher Into Cancelling Talk On Its Tech'". Forbes Inc. March 26, 2015. 
  41. ^
  42. ^
  43. ^

External links[edit]