Build Your Portfolio With Infoblox?

 | May 03, 2012 | 7:25 AM EDT
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Digital networks are the centerpiece of the world today, bringing together devices are disparate as your iPad, your PC, your smartphone, your company's server, Netflix's server, Google's servers, your bank's servers and everything in between in a glowing, pulsating, shimmering web of genius that somehow, amazingly, rarely breaks down.

Think about it for a second and you will admit it is staggering that is all just kind of works.

But corporate IT directors don't actually have the luxury of amazement as they actually need to provide the glue and fix the connections when they frazzle. And increasingly they are helped by a new set of companies like Infoblox (BLOX), an automated network control firm that just went public last week.

Automated network control, in essence, is the technology infrastructure that ties all our devices and networks together in a way that does not require us to know anything about who we are connecting to. It just works.

Consider that your cell phone has to access your carrier's network before that call goes through. Same goes for your iPad when you attempt to access your email.  Every connection between us and the information we seek skims across an always-connected state that has blended into the background of modern life, like oxygen, sunlight and air travel.

Infoblox's job is to automate as much of that process for IT managers as possible, with the goal of cutting down on labor costs for organizations. It does this by bringing together all the servers of a company into an automated database that allows the client to manage their entire infrastructure from one workstation.

Infoblox's software automates the process, cutting back on setup times and making updates and changes much easier. It does this for numerous large companies already, including Adobe Systems (ADBE), Boeing (BA) and Marvell Tech (MRVLL).  

The company was founded  in 1999 by Stuart Bailey, who remains chief technology officer. He honed his technical skills for five years at the National Center for Data Mining at the University of Illinois, before branching out on his own. Needing someone with a leadership background to build an engineering and sales staff, he brought in Robert Thomas as chief executive  Thomas was previously in charge of NetScreen Technologies until Juniper Networks (JNPR) acquired it in 2004.

The management team at Infoblox figures that their customers expect computer networks to work as flawlessly as phone service. They expect it to work 99.9999% of the time and will complain instantly if it doesn't. The company has developed a number of proprietary technical protocols that help businesses achieve this nearly-ridiculous level of continuous business uptime and automated and quick disaster recovery.  

Infoblox's key products include Trinzic DDI, which is an appliance-based IP address management product. The platform's reporting platform provides real-time views of network performance and traffic trends and gives operators ways to track and tweak it all in real time. No longer do network engineers have to sit around waiting for tests to be run. Every point along a network self-reports and Infoblox software permits direct fixes instantly.

Shares went public last month at $16.00, but quickly rose 33% on the first day. It is now valued at just under $1 billion as it has traded in a $20-$22 range.


Infoblox (BLOX)


It's not yet profitable, but has grown revenues by 138% over the last four years and it continues to add to its impressive client list, which now stands at more than 5,000. The number of network connected devices and applications is going to continue to explode, and being able to manage the increased usage and complexity is becoming a high priority.

It's virtually impossible to discuss valuations with newly public companies like this, so I won't. Just understand that Infoblox has first-mover advantages, a large and passionate client list and is protected by a slew of patents. This is another one to watch carefully and consider buying during any broad-market panics later in the year.


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