WAN

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.

Managed WAN services: Who you gonna call?

WAN stands for wide area network, right? Since that’s the case, Current Analysis Research Director Brian Washburn believes in going wide or going home if you’re looking for a managed WAN services provider. When it comes to breadth, depth and reach of services, Washburn looks to the biggest global carriers, like AT&T, Verizon Business, Orange Business and BT Global services, if you’re talking worldwide presence, along with consulting, professional services, global networks and service personnel on-the-ground presence.

Of course lots of smaller telecom service providers offer managed WAN services well, and Washburn notes Qwest, Sprint, Global Crossing, New Edge Networks and MegaPath. In the “rising star” category is PAETEC. Notably absent on his list are cable companies, even though they serve smaller businesses well with managed router, managed firewall and managed VPN offerings. Go figure.

4G LTE wireless broadband to fly in 2010, driving WAN ripple effect

While for a while it looked like the 4G wireless market was going to go all WiMAX all the time because it had a market lead. But LTE technical deployments are gaining serious momentum among wireless operators, according to Infonetics Research’s second edition of its biannual LTE Infrastructure and Subscribers market size and forecast report. And as wireless operators go, so there will be a ripple effect on wireless enterprise WAN options.

Mobile operators are beginning to build out their 4G wireless infrastructure and as of the most recent count, commercial LTE launches for 2010 will number 14 (include Verizon and Japan’s DoCoMo in that group). Infonetics principal analyst of mobile and FMC infrastructure Stephane Teral says macrocells are where the main action is, and will be followed by LTE-based services, which is where the importance of the evolved packet core comes in.

Teral notes that the chief drivers behind LTE becoming the future-proof mobile broadband platform are its peak rates, latency and spectral efficiency. LTE speed? Tests have clocked in 100 Mbps upload and download speeds, but conservative numbers may be closer to 20 Mbps.

As noted in the Infonetics report, Teral projects that based on public announcements made by service providers planning LTE services, the number of LTE service subscribers is expected to exceed 72 million by 2013.

But don’t expect LTE phones for the holidays. The report says that for the first five years of deployment, LTE will be predominantly “PC-based” (laptops, netbooks, dongles, etc.), with LTE smartphones expected to hit the market after 2011, which is when 4G LTE voice, data and multimedia can all mingle freely.

Network security spending driven by cloud computing, managed services

We’ve been asking a lot of questions about network security lately, specifically targeting those companies that are getting more involved in such things as cloud computing, software as a service (SaaS), managed services, and other areas where applications and data are more virtual and bounce around a network like digital nomads.

Most of the vendors we talk to, including those involved in very heavyweight and mission-critical applications like CRM and ERP, insist that current Internet security safeguards and firewall filters are enough to keep everything safe and secure on your WAN, LAN, PAN and so on. A representative for a very big and very well-known enterprise software company also said – quite blithely – that security is the user’s problem and not a big blip on their radar.

This attitude is surprising, given the fact that companies are expected to spend more on security software and services next year, even as the budgets for other infrastructure segments are declining as a result of the weakened economy.

Spending on security software and services is expected to outpace that for general IT, according to market researcher Gartner Inc. Software security spending is expected to grow by approximately 4% in 2010, while spending on security services is projected to grow almost 3%, Gartner reports from a survey of more than 1,000 IT professionals with worldwide budget responsibilities.

The uptick in security spending is in part being driven by a shift toward managed security services, cloud-based email/Web-security solutions, and third-party compliance-related consulting and vulnerability audits and scans, Gartner points out.

Companies looking to validate a higher budget for security spending probably don’t have to look any further than the firms in their own geographic and industry-segment backyard. In its comprehensive Data Breach Investigations Report, Verizon Business documented 90 confirmed security breaches within the businesses that employ its services, totaling roughly 285 million compromised records. Roughly 74% of these breaches came from outside sources and 20% from insiders.

The industries hardest hit by security problems include retail (31%), financial (30%), and food and beverage (14%).

“Businesses should also recognize that new threats or vulnerabilities may require security spending that exceeds the amounts allocated and should consider setting aside up to 15% of the IT security budget to address the potential risks and impact of such unforeseen issues,” said Ruggero Contu, principal research analyst at Gartner.

We couldn’t agree more, especially as more efforts are made to speed things up and boost performance in the WAN, and companies rely more on cloud-based and managed services — all areas that we will be covering more as we move toward the final quarter of 2009 and look for ways to approach networking in a more strategic and security-minded fashion in 2010.

** Gartner’s report, Security Software and Services Spending Will Outpace Other IT Spending Areas in 2010, is available for a fee on the company’s website.

Forecast calls for storage, network convergence in SaaS cloud computing

This has been a cloudy summer for most vendors in the WAN optimization and storage business, although it has absolutely nothing to do with the weather.

An increasing number of companies are relying on Web-based applications and software as a service (SaaS) alternatives — which are the essence of cloud computing — to channel resources to their users over both wired and wireless networks. As a result, the performance and reliability of those networks and point-to-point connections are critical to the success of IT operations – especially when dealing with a widely scattered and remote user base.

As SAP product manager and WAN optimization honcho Jana Richter says, “The more we go into these areas, where the applications are further from the users, the more the issue of accessing and using the applications in an optimally performing manner comes up.“ This is a primary reason why SAP, which is heavily vested in CRM and ERP, has dipped its toes into WAN optimization.

Although the network is important as the data highway, other technology segments have become equally important as indispensable elements in WAN optimization. One of these areas is storage, which explains why such leading players as EMC Corp. are suddenly very focused on cloud computing and such things as WAN acceleration, applications and data prioritization, and business continuity. In fact, the company has partnered for some time with Brocade Communications Systems and Silver Peak Systems toward that end, which from EMC’s viewpoint is the “seamless federation” between internal and external resources, according to an EMC spokesman.

EMC squaring off for net management

EMC is presently working with its network-oriented partners to develop improved management tools that extend across distributed storage systems and the much-hyped network cloud and to deliver more detailed metering of usage patterns. This system, now in public beta, can perhaps be used to charge back users of data resources that flow through various local and wide-area networks or to deliver more management and control to avoid any storms within these applications and data clouds.

The goal, of course, is to parlay storage and WAN capabilities into new business and service models that provide fast and effective content distribution, reliable access to cloud-based applications, and unquestionable backup and redundancy (both for business continuity and compliance). A more street-level objective, however, is to kick the stuffing out of companies like Google and Amazon, which have both carved out a significant business in storage and Web-based access to data.

(Full disclosure: Google is already a very active Silver Peak customer, with more than 100 sites worldwide optimized with the company’s WAN acceleration and prioritization technologies – which leads one to believe there is no such thing as exclusive alliances in networking. It is every WAN for itself.)

Some of the technology drivers that are fueling the nexus of storage and networking include virtualization, data and IT center consolidations, and convergence, according to the experts at Brocade. There are also some technology crossovers: real-time de-duplication of data, which comes from the storage world, plays very well into networking to eliminate delays created by transferring the same information again and again.

The entire field of WAN optimization is also changing as efforts move beyond just speeding things up to providing tools that offer real-time forecasting and preventive measures. This can result in improved capacity and business continuity planning for both networks and the distributed storage farms that dot Web-based clouds – all of which can mean sunnier days in terms of user productivity and network performance.

Pinpoint critical applications when mapping out a WAN plan

In the evolving world of WAN optimization, applications are the new currency in terms of buying into a system that can deliver top performance and is flexible enough to handle changing user demands.  Smart network designers will not only look very carefully at the types of applications that zip across a wired and wireless network, but also prioritize them according to their importance and “mission critical” makeup.

This is not always an easy task, especially if you are dealing with extensive networks that reach out to branch offices and remote users, as well as multiple service level agreements (SLAs).  It also becomes a daunting task since the natural tendency for users is to rate their most-used applications as the most critical - even though that may not necessarily be the case.  This can create problems if an organization is running tens of thousands of applications.  The trick is to zero in on the ones that are absolutely necessary, notes consultant Jim Metzler, vice president of Ashton, Metzler & Associates.   It is critical to narrow that range, he says.

In planning for new equipment additions or WAN upgrades, it is also makes sense to review the applications bouncing around on a network and select equipment based on the mission critical nature of your most key software.

This is exactly what the IT staff did at Performance Health Technology, Ltd. (PH Tech), a healthcare information services provider that specializes in providing up-to-date information on patient benefits and insurance coverage to doctor and hospital subscribers nationwide.  The company previously relied on T1 and a WiMAX connection, but ran into all sorts of reliability issues - some related to weather interference.  The solution was to install an Ecessa Corp. PowerLink WAN controller that could quickly route around faulty connection addresses and channels to find a reliable connection.

The idea is to keep the most important applications and data up and running, even when network issues create a roadblock.  This goes way beyond basic reliability, of course, since the health and welfare of critical networks have a direct impact on business continuity.

Over the next several weeks, SearchEnterpriseWAN will be looking closely at issues including  WAN reliability, fail-safe and contingency planning, specifically focusing on companies that have tackled these issues at the mission critical front lines.  These profiles show that pre-planning is crucial to developing and launching an effective network, and absolutely mandatory as companies rely more on unfaltering access to applications and data.

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 »

Color my (IT) world…green

The Great Recession apparently hasn’t put too much of a damper on corporate green IT initiatives. The reason? Most likely because these efforts can dramatically cut costs (by reducing the number of servers in an organization’s network, for example), and environmentally-sensitive efforts can generate positive PR in a rising tide of negative economic news.

While spending on green IT projects has slowed, along with everything else, these efforts are still top of mind when it comes to project priorities, says market researcher Gartner, Inc., noting that 2009 will most likely be a ‘gap year’ for initiatives. This is a term familiar to Europeans that refers to a period of time taken by a student before attending university to reflect on life, get involved in volunteer services, and oh yeah, have a bit of fun.

In the corporate sense, however, it means keeping a low profile to avoid short-term cost cutting and hopefully survive to budget another day.

Continued »

Networking and IT vendors prepare for the changing face of customers

Now that the last WAN appliance has been packed away and that forgotten computer charger tucked into a drawer, never to be reunited with its owner, Interop 2009 is just a memory. 

However, one question may be lingering long after collected business cards are reviewed and sales prospects investigated: Who are the customers of tomorrow and how will their personal and business makeup impact the way communications products are bought, sold and marketed to the masses?

The answer to this question will have a huge impact on the long-term strategies of such leading networking vendors as Cisco, which believes newly empowered employees, borderless collaborative computing and green initiatives will play a significant role in the psychology and demographics of next-generation buyers, said Tom Wesselman, senior manager of software development at Interop.

The newer generation of enterprise executives and those who will make key purchase decisions over the next decade are very motivated by such things as who has control within a network, universal tele-presence, and consumer-driven technology options, he explained, noting the impact of such devices as Apple’s iPhone on their personal and work habits.

Continued »