Riverbed: Rumors of Steelhead's Death Are Premature

Riverbed CEO says that business is good as the WAN optimization vendor reports its full-year fiscal 2013 results.

By Sean Michael Kerner | Posted Jan 31, 2014
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Riverbed got its start focusing on the WAN optimization business with its Steelhead product line. The product still exists in 2014, though Riverbed's overall company goal is now to tackle the larger application performance management market, of which WAN optimization is but a part.

Riverbed reported its fourth quarter and full year fiscal 2013 earnings late Thursday. For the quarter, revenue came in at $283 million, a 19 percent gain compared to the fourth quarter of 2012. Riverbed reported total revenue of $1 billion, a 26 percent year-over-year gain. Looking forward, Riverbed provided guidance for first quarter fiscal 2014 revenue to be in the range of $262 million to $268 million, which would represent a year-over-year gain of between four and six percent.

"12 months ago, we were an $800 million company, with 1,800 employees, and 85 percent of our revenue coming from a single product," Jerry Kennelly, co-founder and CEO of Riverbed, said during his company's earnings call. "Now, a relatively short time later, we are a billion-dollar-plus company with 2,600 employees, 25,000 customers and a diversified revenue stream."

Riverbed has made a concerted push in recent months to be a full-fledged application performance management vendor.

"The role of IT is to keep people productive by delivering the applications and data that employees, partners and customers need to do their work and keep business moving forward," Kennelly said. "Riverbed empowers IT to do just that."

At Riverbed's analyst day event in November 2013, the company pledged itself to a vision it calls "Location Independent" computing. It's a vision that leverages multiple technologies, including WAN optimization, application delivery, and performance management components.

Kennelly noted that the number of customers who purchased multiple Riverbed products in the same quarter is increasing.

"In the fourth quarter, it was more than 65 percent higher than at the beginning of the year, as we improve our ability to upsell and cross-sell products within the platform," Kennelly said. "For example, a very large consumer products customer, who first began deploying Steelhead in 2006, has just made a multimillion-dollar commitment to deploy a comprehensive suite of performance management solutions over the coming months."

With the increased emphasis on the expanded Riverbed portfolio, Kennelly was asked during the earnings call about the future of the Steelhead WAN optimization appliance technology.

"We sell a serious amount of revenue to the biggest companies in the world every quarter for Steelhead," Kennelly said. "Rumors of its death are premature, it's a good product, a good business and I feel very good about it."

Sean Michael Kerner is a senior editor at Enterprise Networking Planet and InternetNews.com. Follow him on Twitter @TechJournalist

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