You can’t make it run better if you don’t know where the problem lies

You can’t make it run better if you don’t know where the problem lies
Riverbed executive outlines how the company has put together a parcel of tools focused on improving IT resource performance.

Riverbed Technology is best known for its WAN optimization tools, but the company has branched out over the years through multiple acquisitions. Network World Editor in Chief John Dix caught up with Eric Wolford, president of the company’s Products Group, to see how the company is trying to help customers squeeze more efficiency out of their IT resources.

The world knows you as the WAN optimization company, but with the companies you’ve acquired over the years – including the $1 billion acquisition of OPNET in 2012 which gave you tools to gauge application, net and server performance — how do you summarize what Riverbed is all about today?

The key word is performance. So while we have diversified into other products, they are all linked by performance, giving us the ability to diagnose and manage and monitor performance, and address a variety of performance issues. Everything Riverbed does fits into one of those two buckets. Either it’s diagnosing performance problems across an end-to-end IT infrastructure, from the client all the way to code in the data center, to fixing performance problems wherever they may be, on the WAN or over the Internet to consumers or heavy duty business workers.

And the company is organized into four business units now?
Right. We have one called Riverbed Performance Management (RPM), which covers application performance management and network performance management [and was built using the OPNET assets]. We have the Steelhead WAN optimization business. We have the Stingray Business Unit, which offers a software-based application delivery controller. And then we have the Granite business, which is sort of a startup within Riverbed that’s doing incredibly well. It is small, but for its stage of development it’s doing awesome.

Granite is either software or a box that sits at both ends of a network connection and allows customers to take any server or storage or backup out of the remote site, put it in the data center, and project that out to the edge. We provide the acceleration to make it appear and feel like it is local. And users will absolutely see no difference in performance. It will be the exact same performance as if everything was local.

How does revenue break out across these four units?
Steelhead is in the low 70s percent, Riverbed Performance Management is like 22% to 23% and Stingray is 5%. Granite right now hasn’t been broken out. We have about 100 customers and the growth rate is similar to the ramp that Steelhead had in its first five or six quarters. I’m sure when Granite gets to be a little bigger we will break it out.

Regarding the RPM group, has OPNET been fully integrated at this point?
I would say we’re probably 65% to 70% of the way there. From a systems perspective, it’s done. And from a financial accounting and back office perspective, all of that is done. As for sales force integration … unfortunately, you can draw it up really nicely on Power Point slides and Excel spreadsheets and say, “OK, it’s done,” but then there are the human factors, getting everybody in place, and you get a lot of square pegs in round holes when you do this type of integration, and so there’s a sorting out period and a learning period that takes place. And that takes a reasonable amount of time, but we’re over the halfway point.

How do you see the revenue breakout changing over time?
Riverbed year-over-year comparisons are a little weird because there’s no OPNET base in the former year. But if you pull out OPNET and take out the WAN optimization business, it’s growing at about 50%. The WANop business is growing at mid-single digits. So when you have a large business growing in the mid-single digits and a bunch that are growing at almost 50%, that’s going to change the distribution of your revenue over time. When you throw OPNET into the picture, and once we get past the integration issues, we believe there is an opportunity for that business to grow substantially faster than the core business.

Sticking with the core WAN business for a minute, if all the corporate WAN links in the world added up to 100%, what percentage today would you say have been optimized?
You would never optimize some locations because of mitigating circumstances, but if you take that chunk out, maybe we’re 25% or 30% of the way through the potential remaining market.

You offer both hardware and software-based WAN optimization products. Do customers still prefer the appliance approach?
Customers with remote sites still prefer a box vs. software. Even though it’s cheaper to buy the software, it requires the customer to do more work. They have to get their own hardware and get their own operating system and system engineer it themselves. And when there’s a problem, is the problem the box or is the problem the software? But in the data center they are way more comfortable with the software approach because they live in that environment day in and day out.

Are you guys still figuring out ways to squeeze more and more traffic into WAN pipes, or are we already 99% of the way there?
The need for efficiency changes as applications change because the application environment is dynamic. Take SharePoint. We’ve been optimizing SharePoint for years, but then Microsoft comes out with a new release, it’s more complicated and more chattiness is introduced and it requires us to do more application-specific optimization to address that. Then there are brand new applications that come online, like VDI, which require a new type of optimization to make it work well. So whether it’s a SharePoint that’s changing or whether it’s a new type of application, there is always optimization work to be done.

On deduplication, for the most part we have a great ability to deduplicate and there’s not enormous marginal improvements that can be made. The only caveat is when an application comes out encrypted, well then we have to do the work to de-encrypt it, do our deduplication magic, and then re-encrypt it.

In the bigger picture world of application performance, how much of the problem ends up being a WAN performance issue vs. all the other things that can be involved?
An excellent question. That question is, in fact, what motivated us to purchase OPNET. If you go to a more senior person in an IT organization that has responsibility for delivery of IT services, they want to know where problems are and how to fix them. So network performance problems are definitely part of it, but isn’t like, if the network works great everything is fine.


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