Riverbed touts its cloud-first commitment at channel event

Riverbed delineated the progress it has made in its cloud strategy over the past year – while also giving Cisco a backhanded compliment for providing leads for Riverbed SD-WAN solutions.

Riverbed CEO Jerry Kennelly

SANTA BARBARA CA – Today, at their third annual partner summit, Riverbed Technologies outlined its cloud strategy for its partners, emphasizing the theme of disruption created by the cloud – and why they believe Riverbed is extremely well positioned to capitalize on it.

Articulating their cloud strategy is particularly important for Riverbed because – as the company acknowledges – it has been a latecomer to cloud and SD-WAN. Its cloud portfolio has been jump-started by the acquisition of three companies over the last 18 months, and its cloud strategy has moved from the general to the specific in a fairly short time. Riverbed does not, however, see its status as a relative newcomer to the cloud as a disadvantage.

“Sometimes, it’s better to be later than early,” said Riverbed CEO Jerry Kennelly.

“While we started in the data centre, we have pivoted to where the future is,” said Subbu Iyer, Riverbed’s Chief Marketing Officer. “Our solutions are now geared to the cloud-first customer.”

Karl Meulema, Riverbed’s channel chief, talked at some length on the disruptive element of cloud in the keynote. He made reference to the music industry, which went from a $16 billion dollar company in 1999 dominated by CD recordings and half a dozen players, to a 2008 industry where the physical media business was down to 6.3 billion, and the old players were gone, to today’s business, which is once again 16 billion, but which is mainly downloading streaming music, and with a focus on events and concerts.

“When customers are looking for a different experience they will find innovators to help them with that,” he said. “That change is small at the beginning, which makes it easy for the big players to be in denial, but once it takes on speed it’s unstoppable.”

Meulema said the same process has been in IT in its transition from a 1985 world of big mainframe and minicomputer companies on proprietary systems, to the growth of open systems by the mid-90s which caused these companies to disappear or rewire their business model, to the growing cloud market of today.

“Customers looking for companies who are committed to change around cloud, not those paying lip service to it to protect their current revenue model,” he said. “In cloud, we are past the point of early adopters, and the speed at which this is going to happen is getting serious. Customers want vendors who are serious about cloud, and who they know will be around in the next two to four years, which most point product players won’t be. They want companies who can deliver, agility, visibility and automation with the cloud.”

Meulema challenged Riverbed’s partners to join the vendor in this commitment to cloud.

‘How do you fit into all of this? You play a crucial role. You understand your customers’ business, understand the technology and are committed to helping them with that change. Are you going to go with moving to the cloud, or stick with what you have done in the past? We have made that choice as a company. We are so much more dedicated to moving to the cloud than we were two years ago. The question for you is – are you ready to make that choice?”

Kennelly emphasized the importance of three key acquisitions to this strategy: Ocedo, Aternity, and last week, Xirrus.

“We have made these three exciting acquisitions in the last 18 months – and we will do more,” he said.

Acquiring German SD-WAN vendor Ocedo in early 2016 really brought Riverbed into the SD-WAN space.

“Our strategy is to create best of breed technology, and have a merchant class of technologists – our partners – to deliver it to customers,” he said. “The Ocedo acquisition gave us the cloud-based management we needed to be best of breed. Cisco has Meraki, and it has been dominant, but Meraki has architecture that was designed in 2004. Ocedo didn’t even start till 2011. It’s a generation beyond what everyone else has out there.”

Kennelly also noted the importance of last summer’s acquisition of Aternity to Riverbed’s SteelCentral network performance management solution. Aternity provided a level of visibility that has not existed before, and takes visibility monitoring out of its silo.

“If you don’t sell SteelCentral, you are missing out,” Kennelly told partners.

The third acquisition, Xirrus, also fills a void. Xirrus makes high grade enterprise class wi-fi products, and Kennelly said that they won’t interfere with that, and will continue to sell the Xirrus portfolio separately.

“We will however, roll it into our SteelConnect offering as the wired LAN piece of doing SD-WAN,” he said. “Ocedo had a lightweight wi-fi product in it, but it wasn’t enterprise class. Xirrus is enterprise class, and has some huge deployments like the Moscone Center in San Francisco.”

SteelConnect, Riverbed’s next-gen SD-WAN offering, is another area where Kennelly said partners need to place their bets.

“SteelConnect is nascent,” Kennelly said. “Its not like Steelhead where you put it in, it blows people away and they buy it the next day. SD-WAN is an evangelical sale. You have to work at it, and get those reference accounts. It’s our future. It’s important.”

The principal target of all this of course is Cisco – a tricky task for Riverbed since about two thirds of their partners are also Cisco partners.

“We aren’t anti-Cisco,” Kennelly said. “We respect them. They are an incredible lead generation machine for our products. Cisco made Steelhead great and will create a large market for SD-WAN as well because Cisco poisons their own SD WAN product with WAAS, while we sell Steelheads with SD-WAN together.”

“SD-WAN as a point product is past its prime,” Meulema said. “if your only option is to combine it with is WAAS, you are weakening it further as a product. Your product is only as strong as your weakest link.”

The upshot of all this appears to be that Riverbed’s cloud story is much better fleshed out, compared with where it stood at last year’s event.

“It looks like they’ve got their arms around cloud now, whereas before it was unclear,” said Pam Miller, Research Director, Infrastructure Channels Research at IDC.