WAN Optimization Update – Riverbed Positioning and Rumors of an Expand Buyout?

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See here for an article at “The Globes” (an Isreali business analyst site) discussing talks between Riverbed and Expand Networks.  It seems according to The Globes, a potential buyout is looming in the future.  If this came to fruition it would represent still further consolidation  of the WAN Optimization market place.  In honor of the rumors I figured I’d share some thoughts I wrote about Riverbed and add some assumptions on the potential Expand aquisition. (Please Note: Any commentary on a Riverbed/Expand acquisition is completely based on independent opinion and hypothesis.  Our reposting of the above article is not ATG endorsing or confirming the above article is acurate.)

Riverbed’s unique technical offering, strategic acquisitions, and product roadmap vision will all continue to contribute to their upstream success.  A strong ROI justification, regularly less than six months, has assisted Riverbed’s success as corporations adjusted to the  economic environment over the past months.

The Technology:

Riverbed’s technology offers a market leading wide-area acceleration implementation.  Their solution is a leader in the majority of the WAN optimization opportunities world-wide.  Specifically, Riverbed has enjoyed broad success in the design, manufacturing, law, and fortune 500 market segments delivering extremely impressive compression results, especially on large data moves and “Enterprize Applications”.

Riverbed’s solution was the first to utilize application protocols for accelerating end-user performance in branch offices.  In addition to traditional network caching and acceleration, Riverbed pioneered application-level acceleration.  Operating at both the network layer and application layer led to new performance impacts and opened new potential for distributing IT to distributed organizations globally.  Still today this breakthrough leads to them outperforming most other solutions on inefficient but business critical applications like Exchange, Office, and MS File Sharing (CIFS).

Their technology was only hampered and under-performing in a few key markets due to design and missing features.  1) The riverbed technology was based on hard-drive caches, resulting in some additional latency to packets as they passed the devices.  This effect is more than compensated by it’s high performance compression in most cases, but severely hampers their ability to impact latency sensitive and “interactive” application traffic. (VoIP, Citrix/SBC, and VDI to name a few),  2) Lack of industrial QoS (discussed below in their Mazu Aquisition details), and 3) lack of support for a standardized TCP Acceleration protocol (partially remedied by a tack-on OEM of Global Protocol’s  SCPS implementation.).  The latter of which has severly impacted Riverbed’s ability to penetrate the Public Sector, Satellite,  and more strict Government Networks.

Key Acquisitions and OEM Agreements:

In the past two quarters Riverbed has made several news-worthy announcements that validate their vision and execution over the past five years.  On January 20th 2009, Riverbed announced it acquired Mazu Networks.  Mazu Networks, headquartered in Cambridge, MA – USA, has developed a software product dubbed the “Mazu Profiler”.  Mazu’s Profiler provides application visibility, performance management, improved threat and compliance management, and CMDB discovery.  The product will fill Riverbed’s lack of Quality of Service and also provide some value-add to service providers by reporting use, performance issues, and security threats in alerts and detailed reports.  This functionality will give Riverbed more competitive leverage against the Bluecoat and Cisco product lines which are now challenging Riverbed’s market presence.  It will also fill some of the gaps in their QoS implementation, but not all.

On January 26th 2009 Riverbed subsequently announced their integration into the HP Procurve Router product line, representing their first router-based functionality, directly competing with the Cisco combined solution.  Riverbed has stated General Availability of the blade hosted offering as second half of 2009.  Details are still slim on this integration and we’re unclear to it’s scalability, feature set, and management specifics, and will update the field as more is learned.  Riverbed has had a long term relationship with HP beginning years ago when they hosted their appliance on HP hardware.

Lastly as pointed out above, Riverbed has also recently announced the ability to support SCPS based TCP Acceleration on their WAN Optimization products through the OEM of Global Protocol’s Skipware.  This protocol support will directly assist Riverbed in penetrating the government market segment where they have been historically weak.

An aquisition of Expand would be quite strategic for Riverbed when you add it all up.  First of all Expand’s technology works at the IP layer and will open UDP traffic optimizations to Riverbed (a TCP based device), if they so choose.  It also delivers a very functional and proven memory based caching implementation along with industrial QoS, opening Riverbed to the interactive and latency sensitive markets which include the ever-growing VDI frenzy, P2P protocols, and eventually cloud traffic types.  Along with their HP relationships, Riverbed would gain a strategic position with 3com and China’s H3c both integrated OEM relationships for Expand.  Expand’s definitive area of dominance in the Government and Satellite Networks would be a huge win for Riverbed, who has failed to penetrate both for nearly half a decade.  Lastly, Expand acquired “Netpriva” which was a little known but very impressive and well-designed client based optimization solution.  While we haven’t worked with the Expand integrated and re-designed Netpriva product, we were impressed with Netpriva’s original offering and are excited to see it hit the market.  This additional client functionality may also be a target to help bolster Riverbed’s own client offering, which hit less than stellar market adoption.  Of course, they could just be taking out a pesky competitor who’s carved out a nice niche of late in a few key markets!!!

Only time will tell, but as we discover any cold-hard facts about an acquisition we’ll post updates.