Riverbed responding to fundamental shift in deployment of IT services

At Riverbed’s partner event, their Chief Strategy Officer outlined a complex and model-driven paradigm of how modern IT services are being transformed digitally, and his view of how the company and its partners need to respond. Interestingly, partners seemed to get it.

Phil Harris RVBD CSO

Riverbed Chief Strategy Officer Phil Harris

SCOTTSDALE, AZ – At Riverbed’s 2016 Partner Summit, new Chief Strategy Officer Phil Harris used his keynote to lay out his vision of how digital transformation is fundamentally changing the way in which mainstream IT services are being deployed and how new capabilities are being built. He then stated how Riverbed is responding to this process of change, and why and how partners need to join them on the journey.

“I came on board with Riverbed in November to rethink strategy for the company, and since then I have spent a lot of time working to clarify this vision, how our acquisition of Ocedo fits into it, and how Riverbed will build out a technology platform that is future ready,” Harris said.

Harris began by emphasizing his conviction that technology strategy isn’t about abstract concepts. While the process of change that he outlined is deeply theoretical and model driven, he took pains to illustrate its grounding in changing demand-side and supply-side dynamics. It’s the type of interpretation that would have flown over the heads of a typical partner audience of a decade ago, whose emphasis was on the primacy of technology. For today’s partner decision-makers, who are much more comfortable with being able to ground technology in a business case argument for C-level executives, it seemed to generate a largely positive response.

“We can’t think about technology the way we have for the last 20-30 years,” Harris said, before outlining some basic tenets of today. “Things have to be incredibly agile. It’s all about how quickly new services can be deployed. The Internet of Things will drive us into a new level of scale that makes us think about scalability in a different way – and we don’t know what those limits will be. Security has been the antithesis to scalability but now it has to be part of the conversation. Security is inherent in everything Riverbed does today, because the ability to understand things at the application process level all the way to the infrastructure becomes a security question. Can we detect anomalous behavior, operating conditions that fall outside of our policies’ boundaries?”

Automation is critical in this whole process to overcome the human factor, by leveraging visibility to make real time decisions, which are knowledge-based, rather than pre-programming based. Automating things while keeping within compliance is the challenge here, given that the two concepts pull in different directions.

Harris then outlined his view of how demand-side dynamics have fundamentally changed the role of key actor groups, including operations people working for the CIO, consumers, service owners who don’t work for the CIO, and developers. The developer community for example, are the people who in the 1990s programmed for large systems, then in the last decade became solutions developers building apps on the client server. Now they define specific services.

“They have adopted the changing role of technology faster than anyone else,” Harris said.

He emphasized that the interaction between these groups is of critical importance and has led to an environment in which the traditional iterative development cycle is now being replaced by continual development.

“AWS was the first to think about continual development and continual releases in this way, asynchronous releases where customers don’t even know there has been a new release, and just see new capabilities,” Harris said. “Netflix doesn’t have version numbers either, for the same reason.”

These demand side changes should fundamentally drive how we think about the supply side, Harris continued, pointing to a model of supply side dynamics with variances between open and closed systems at one end, and governance versus agility at the other, creating a block of four quadrants, drivers, transformers, traditional and leaders.

Harris then related the theoretical modelling to the strategy necessary to deal with it.

“It’s key that we have our focus in ALL of these quadrants – drivers, transformers, traditional and leaders,” he said. “We have to think about dynamics on all of these quadrants. Different maturity models will always dictate our capabilities to grow.” Drivers, for example, have a projected business services growth rate of about 18 per cent CAGR over the next three years, while the traditional is around 4 per cent.

“We are seeing a fundamental shift in both where mainstream IT services are being deployed and how new capabilities are being built,” Harris stressed. “Right now, about 70 per cent of money is being spent in the traditional quadrant, with about 10 per cent on drivers and 10 per cent transformers. Over the next three years however, this will change to about 40 per cent traditional, 30 per cent drivers and 30 per cent transformers – and many think these numbers are too conservative.”

The bottom line for partners from this whole process, Harris said, that they need to define their strategy by understanding how these supply and demand side changes are moving the market for IT services, making sure that they are able to respond to a broad swath of this changing market, not just a small part of it, and rationalizing investments they need to make in developing solutions for their customers to take them on this journey.

“As we think about how we provide secure access to these services and how we scale and secure that data, and optimize them independent of scale, with complete vertical and horizontal visibility, Riverbed is truly investing in all these areas, not just one part of the overall space. But we can’t do this by ourselves. As we go through the rest of the day and a half [at Partner Summit], the conversation we should be having is not just about the technology. It’s about how we build innovative services to help customers succeed.”

So what did partners think?

“It was pretty high level,” said Rene B, Pedersen, CEO of Danish solution provider Rantek, which has been a Riverbed partner since 2004 and derive 90 per cent of their revenues from them. “But for me, the main message, what I will tell my team and my customers when I get back, is that while we will do 80 per cent the same as we did last year, the rest is all about what we can embed in our total optimization as we move from WAN optimization to SD-WAN. SD-WAN is what’s going to bring in the five billion in revenues [that CEO Jerry Kennelly projected]. As a partner, this is extremely compelling. Over the next 24 months, I believe Riverbed will be able to embed all these capabilities into the platform, and then, if you can get that into a customer, you own that customer, and you have never been able to do that with Riverbed’s existing solutions.”

The message of shifting their practice to meet the changes created by the supply and demand side evolution also impressed Tony West, Senior VP of Sales and Marketing at Herndon VA-based Spectrum Systems.

“If we don’t make this kind of tectonic shift, we aren’t going to survive, at least for long,” West said. “If you aren’t saying these kind of things to your customer, you are toast. The rising tide of our customer base is younger people with whom this message resonates. This is also where the money is, and that means extra margins, so the sooner you do this, the sooner you get better margins. It’s a great message. It’s just up to us to do something about this.”

Cheryl Neal, VP-Data, Networking and Security Solutions at distributor partner Avnet, indicated that she had attended the earlier Executive Advisory Council session when Harris was still working through his ideas, and found it all very intriguing.

“It makes a ton of sense,” she said. “I like the approach that you really need to sell in all of the quadrants. There are different consumption models out there, and it’s important to be able to cover all of them.”