WAN optimization

Riverbed eyes Israeli WAN optimization start-up for acquisition, but why?

Oh, how the rumor mill churns! Israeli business publication Globes reports that “sources” say Riverbed Technology Inc. may buy Expand Networks, a Tel Aviv-based fellow WAN optimization vendor.

The reporters at Globes haven’t gotten any official word from Riverbed or Expand, but their sources say the deal could be somewhere between $30-40 million. Globes hints that Expand has run into some financial troubles, and it seems the vultures are circling:

Gartner said that Expand was a small private company in a market led by large companies. In other words, it would not survive independently for long.

The sources added that Expand had been in contact with other potential buyers, and another communications equipment vendor may end up acquiring it, or else a company that wants to enter the sector.

Interesting that Riverbed would be making this play. It is already an established leader in the WAN optimization market, so what does Expand have that Riverbed wants? The blogosphere seems pretty quiet on it.

British IT outlet The Register speculates the two companies are just in the right place at the right time.

[Riverbed] earned $102m in its third 2009 quarter, a 12 per cent increase on the second quarter and 18 per cent up on the year-ago quarter. Net income was $5.5m, which compares to a net loss a year ago of $11m. It reported a $38m cash flow from operations and $297m in cash and marketable securities and no debt. That’s a nice situation to be in with a bottoming out, or maybe recovering economy.

The previous two quarters had been disappointing and a much-heralded Atlas deduplication product technology has been shelved. So it appears Riverbed’s growth is going to be by acquisition and not by organically developing its own technology.

… It looks as if, with that funder’s vote of no confidence in Expand, the company is on the selling block and looking to be bought, with Riverbed a front runner.

Fellow TechTarget blogger Shamus McGillicuddy also points out any possible acquisition is something Riverbed partners (and IT shops who use these VARs) to keep an eye on:

If the Riverbed-Expand deal happens, Riverbed and Expand partners should watch carefully how Riverbed incorporates Expand’s technology into its product portfolio. Certainly Riverbed would prioritize the integration of Expand’s remote and virtual desktop acceleration capabilities into its Steelhead appliances.

Riverbed might also try to integrate Expand’s vision for software-only WAN optimization appliances. Riverbed’s approach focuses more on having physical boxes between each location, although its Steelhead Mobile technology has departed from this vision, allowing enterprises to deploy acceleration software on end user devices.

WANs across the water, WAN optimization across the seas

Just like other technology sectors, the WAN optimization market has been battered by the recession and a cautious reluctance by IT types to spend any significant money on network upgrades. Nevertheless, the WAN optimization market has survived and even (relatively) thrived in this tough and bitter economy, with sales hitting about $226 million in Q1 this year.

Things are just as tough outside the U.S., although the picture is a tad brighter in Asia-Pacific countries (including Japan), which had experienced a 21% yearly growth until declining to 13.3% this year. They still chalked up revenues of US$279.6 million, according to our friends at Frost & Sullivan. The market researcher expects growth to rocket to 22.2% next year and hit US$831.6 million by 2015.*

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From the WAN Mailbag: Encryption, MPLS, optimization and more

One of the benefits of online publishing, as opposed to traditional paper and ink methods, is the Internet provides a more capable (and sometimes culpable) two-way street in terms of getting readers involved in the information purveyance process.

Social computing networks like Twitter, LinkedIn and Plaxo add to the interaction by channeling bits of information to specific user communities, or providing a faster and more effective route to important and useful articles. Over the past few weeks, we have received a number of comments from readers on various topics related to WANs and networking. The following is a quick taste and excerpts of what some of our readers are saying.

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On the subject of WAN-based encryption technologies:

Wouldn’t it be more prudent to encrypt data when it is written, so no data integrity is compromised? This way data can traverse the WAN, public or private, without compromise.

It is about centralized control and management. WAN throughput might be impacted, since most WAN optimizers need to cache or manipulate data for some type of acceleration. If the data has already been compressed or encrypted or de-duped, how do you optimize it? Continued »

Reading the writing on the WAN wall

One of the more vexing issues facing network managers today is how to cost effectively tweak a WAN to keep up with the rising number of remote workers and increasing reliance on branch office activities and technology capabilities.

On the one hand, companies are trying to centralize IT and network operations to maintain costs and simplify operations. On the other, there is an effort to provide more operational autonomy to branch offices, as they become the ‘frontline’ conduits for mission critical information and access to customers and suppliers.

This is an issue we continue to cover in the digital pages of SearchEnterpriseWAN.com, most recently in an article that looks at the trend to avoid costly WAN appliances in favor of WAN virtualization and software, and in profiles of major global companies like Carhartt, Inc., which is taking an “old school” but nonetheless successful approach, and deploying optimization appliances at critical branch offices.
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Email’s Sting: Moving beyond the buzz of ‘killer apps’

Of all the overused and inane buzzwords in the IT industry, the phrase “killer application” has to be right up there in the top five. Vendors peddling superfluous technology and latest add-on add-in kudzu always seem to truck out this term when they talk about future strategies and market share, as in, “Our new whiz-bang gizmo will surely take off when that ‘killer app’ surfaces to drive the demand for our product!”

Analysts and market researchers, like weather forecasters, don’t often take the time to look out the window to see what is happening in the real world. As a result, they too throw around buzzwords and generic terms like beaded necklaces at a Mardi Gras parade. Among the terms now being tossed in the air to giddy end users are cloud computing, telepresence and social computing -– the last one of my favorites since the antithesis would, of course, be anti-social computing. I also like it when vendors marry buzzwords and come up with terms like “unified communications in the cloud,” which suggest that clouds are getting in the way of clear market thinking.

WAN-dow dressing

Killer app is particularly annoying, though, since there is really no such thing because the applications in use are obviously more important to me than the applicants used on your systems. It’s just that simple and personal. If there is one application that might be awarded “killer” status, however, it is email, since everyone knows it, loves it (most times) and uses it. You can drape it in all sorts of buzzword dressing and fold it into such terms as collaborative computing, unified communications or instant messaging, but, at the end of the day, it works, it’s effective and it is the mainstay of most any enterprise computing network.

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