WAN Optimization Category Archives

April 30, 2008

Thoughts from Interop & winning Best of Interop

It's great to see Interop continue to rebuild intensity and attendee size from the boom to bust days and back. The floor certainly seems busy, as do many of the sessions we've attended and spoken at.

Application delivery continues to grow in focus over the last few years, and 2008 is no exception...

...nearly half of the advertising banners outside the main showfloor entrance are from app delivery vendors. And an entire track of speaking sessions moderated by senior analyst Jim Metzler is around the subjet. This definitely is a topic that has reached mainstream.

Cisco has also reached mainstream with its WAAS WAN optimization solution, as the judges for Interop awarded CIsco yesterday.

If you're at Interop while reading this, please come by our booth and say hello. If you're reading this anywhere else, please post your thoughts on where WAN optimization technology is in your planning or production cycle -- we and our readers want to learn from your experience.

Cheers from Interop.

Posted by Mark Weiner at 09:29 AM Permalink | Comments (0) | TrackBacks (0)

April 21, 2008

WAN Optimization getting Hot

The number of competitors left standing gets smaller, WAN Optimization heats up. In the current market economy technologies that save money, very tangibly will most likely do well- WAN Optmization, Data De-Duplication, etc have a nice outlook. Gaining market share in downturned economic climates is often a good strategy as you can gain footprint and the business is well poised during the regression to the growth mean over time.

NEW YORK (Dow Jones)--Blue Coat Systems Inc. (BCSI) agreed to acquire Packeteer Inc. (PKTR) in a $268 million all-cash deal that will augment Blue Coat's ability to speed the flow of corporate network traffic.

The purchase will allow Blue Coat, Sunnyvale, Calif., which provides equipment and software that helps its corporate customers better manage and protect their networks, to add Packeteer's technology to its product portfolio. The company sees the deal strengthening its standing in the wide area network optimization market, a lucrative segment that deals with helping remote workers connect to their company's networks faster.

"We took a broader view of the WAN optimization market and found profound changes taking place," said Brian NeSmith, president and chief executive of Blue Coat.

As companies strive to increase the efficiency and productivity, the business of boosting network speeds has become an attractive one. In particular, Packeteer, Cupertino, Calif., specializes in improving the performance for users who connect to the corporate infrastructure remotely through a virtual private network - an increasing trend as more workers go mobile.

But in the past year, Packeteer's business has cooled down, with 2007 sales dipping slightly over the year-earlier period. Rival Riverbed Technology Inc. (RVBD), meanwhile, more than doubled its revenue in the same period.

Blue Coat is hoping Packeteer's technology will allow it to break free from a cutthroat pack of WAN optimization providers that includes Riverbed and networking titan Cisco Systems Inc. (CSCO).

"(The deal) differentiates us from more vanilla operations purely focused on WAN optimization," NeSmith said in an interview with Dow Jones Newswires, taking a veiled shot at Riverbed's sole focus on WAN optimization.

Blue Coat's offer to pay $7.10 a share in cash represents a 15% premium over Packeteer's Friday closing price of $6.18. Packeteer recently traded at $6.98, up 13%, or 80 cents. Blue Coat fell 3%, or 57 cents, to $19.18.

The deal is expected to contribute to earnings in the fiscal second quarter, excluding one-time costs related to the acquisition.

Blue Coat already has a WAN optimization business, and NeSmith said job reductions and other merger-related cuts would occur. He didn't provide any more specific information.

NeSmith acknowledged Packeteer's recent problems, noting that the company didn't invest in its core products and failed to make a dent in the newer segments of the market.

Packeteer plans to "reinvigorate" its product line and "bring a discipline of execution that will work more effectively than what they had," he said.

In swooping in and buying Packeteer, Blue Coat side-stepped Elliot Associates LP, which was also interested in the company. Elliott Associates previously offered to buy Packeteer for $5.50 a share in cash, or $190 million.

Blue Coat agreed to issue $80 million of zero coupon convertible notes in a private placement to Francisco Partners II LP, an associate of Elliot. Elliot, meanwhile, will terminate its tender offer and sell its 9.9% interest in Packeteer to Blue Coat, the company said.

Posted by Douglas Gourlay at 10:44 AM Permalink | Comments (0) | TrackBacks (0)

April 15, 2008

Numbers Don't Lie (Vendors Often Do) -- WAAS Results from TheInfoPro

TheInfoPro, a leading market survey and analysis firm, has completed its fourth "WAVE report" on enterprise IT spending and priorities. Not suprisingly, WAN optimization came out as a very hot technology focus area: "WAN Data Compression and Acceleration Hardware has overtaken 10 Gbps Ethernet to assume the top spot on the Data Networking Infrastructure Technology Heat Index®in Wave 4."

But another interesting point comes up when TheInfoPro looks at specific vendors in the market...

When TheInfoPro gets into detail on what their respondents said about different vendors, the results are quite interesting: "Riverbed continues to appear in a strong position, but has lost its designation as the lead in plan vendor in this segment to Cisco...Cisco now leads among both F1000 and MSE organization for mentions in consideration...."

So if that's the case per non-vendor funded TheInfoPro research, then how do recent #'s from other vendors come out like this: "Riverbed's top two competitors remain Cisco (competing in 40% of customer decisions) and Juniper (competing in 23% of customer decisions). Riverbed continues to maintain a 90% win rate against all of its competitors.

Source: CNN Money pick up of Riverbed announcement.

Especially when TheInfoPro's prior WAVE 3 report (July 2007) also stated Cisco had become the lead vendor under consideration.

Are Cisco and other vendors winning a lot of "non competitive deals", like some recent vendor blog posting have suggested...or are those vendors' win analyses not as accurate as they could be? Since Cisco has 2500+ customers, and other vendors besides Riverbed have their base too, any "90%+ number" seems a little circumspect, large market oppty aside...but we'll leave that to your own judgement, blog posts and future TheInfoPro and other firms' reports.

Posted by Mark Weiner at 11:03 PM Permalink | Comments (1) | TrackBacks (0)

WAAS Up Larry!

Recently a partner to one of our competitors, decided to deride our claims of success in the WAN Optimization market. Thought I would post this recent video of a healthy sized deployment of WAN Optimization technologies by Pacer International.

Posted by Douglas Gourlay at 07:42 PM Permalink | Comments (0) | TrackBacks (0)

April 04, 2008

Longer Sales Cycles in WAN Optimization

I am going to do my best here to avoid casting too many stones, but this just amuses me. Six quarters ago I started in this role. A new director on my team was leading a product launch for a technology we call Wide-Area Acceleration Services, or WAAS for short. It was a promising technology but I was a bit circumspect for a variety of reasons- sales channel, who do we sell it to, how do I get our own sales force excited about it, and one very strong competitor in Riverbed.

Mark, and the General Manager for this product, George Kurian, turned me around over the course of the next four quarters by working to with the support of over 1000 customers for WAAS, integrating it into our branch office routers, and showing an aggressive roadmap that has been consistently delivered to.

Two quarters into my 'WAAS-experience' Riverbed decided to mention that they are winning 98 out of 105 deals, and touting that there would be two memorable IPOs in the past decade, Riverbed and Google. Ya gotta love the hype factor here, but there is nothing that infuriates a sales organization and catalyzes them like tactless rhetoric with poorly substantiated claims.

So yesterday I got twp pieces of almost simultaneous enlightening news. Not only is the company I once viewed as a competitor about equal with us in market share (20.2% for them, 20.0% for us according to a leading analyst firm), they also had to pre-announce their miss on their earnings for this quarter. That's really gotta hurt.

The best part for me, almost the 'sport' in the entire thing, is that January was challenging month in the market, the roughest we've seen in a while. When we reported our earnings for our Q2, ending at the end of January it included this rough month. Many point-product vendors though have a January to March quarter though and are just now reporting on what we talked about a couple of months ago. Maybe our 'weird' fiscal quarters do have a benefit after all!

So while our competitions bemoans, lengthening sales cycles, enterprise softness, etc I have to raise the question- "While you used to claim 98% win rate and no competition, could the equality in market share really be more an indication that you are simply not seeing all the opportunity and be a sales coverage issue, or simply that there is now a more superior product and solution in the market? Or was the 98% just bluster and hype designed to 'pump up the volume' so to speak?"

While I guess I grew into this market initially trying to figure out how to outflank a competitor, as we gained momentum, crossed significant product milestones, and have moved more and more to an integrated solution I guess I don't see Riverbed as a competitor now but more as a niche player that will always help keep us on our toes but no real threat.

Next week, we'll talk about how to take on and out another has-been....

Posted by Douglas Gourlay at 06:19 AM Permalink | Comments (6) | TrackBacks (0)