Silver Peak also unveiled the Virtual Acceleration Open Architecture (VXOA), a new software-only strategy that combines subscription-based pricing with technology hooks that help partners and customers integrate its software with other applications or components.
"It's the most significant announcement in our history," Rick Tinsley, Silver Peak's chief executive officer, said in an interview. It also could be significant for users because Silver Peak aims to boost performance of all IP applications, potentially making its technology even more widely applicable than the TCP acceleration found in most WAN optimization appliances. It marks a big shift in strategy for Silver Peak, which until now has focused on very high performance acceleration, only last month launching a 2.5 Gbps box for data center-to-data center links that by some measures was the industry's highest capacity optimization box.
Silver Peak said it isn't abandoning the high-end hardware, but is just trying to give customers more options and broaden the market. "We've been interested in this for three to four years, but the compute power wasn't there," said Tinsley. Server computing power has advanced much faster than WAN bandwidth, meaning that a WAN optimizer that used to require a dedicated appliance can now run in a virtual machine in a server or another box. It will continue to make hardware for the highest performance links, but sees software becoming the major part of its business.
Most other WAN optimization vendors have already shipped software versions of their appliances, with some such as Certeon focusing on software entirely. The concept isn't even totally new to Silver Peak, which already offered virtual appliances through its VX line. "We stuck a toe in the water with VX and were pleasantly surprised at the uptake," said Tinsley. "Then Avaya approached us about doing more."
Aside from the new corporate strategy, the main difference with VXOA is the inclusion of an application programming interface (API) and a software development kit (SDK) for easier integration. In addition, VXOA adds support for Microsoft Hyper-V, Linux KVM, and the Xen Hypervisor used by Citrix and Oracle whereas the pervious software was restricted to VMware.
Giving developers access to the Silver Peak software sounds a lot like the platform strategy of other vendors, including WAN optimization market leader Riverbed, but Silver Peak emphasizes that it is aiming to be a software platform whereas Riverbed is still selling hardware. "Riverbed partitions their appliance then runs VMware so that it gives resources to others. That is in stark contrast to what we're doing," said Tinsley. "We have no intention of competing with hardware or networking vendors."
Instead, it aims to partner with them, with the new Avaya partnership involving its WAN acceleration software running Avaya's branch office Secure Router 4134. The partnership isn't exclusive for either side: Avaya supports other WAN optimization software, and Silver Peak said that one of its customers is already running VXOA on a Cisco Integrated Services Router.
In addition to selling software, Silver Peak is also trying to get into the software-as-a-service business, letting enterprises pay an annual fee instead of buying a one-time license. "It's hard to do subscription-based pricing with hardware," said Tinsley. "If they don't renew the subscription, they've still got the box." He said he hopes that this will make the technology more attractive as cloud computing drives IT budgets from capex to opex, and perhaps more importantly let customers try out the software without committing to it.
The SaaS option may be a better deal for customers who don't anticipate using Silver Peak for three years or more, but those with longer time horizons may want to stick to a purchased license. For example, Silver Peak's lowest cost option is a 4-Mbps optimizer with a list price of $1,600 per year as a service, compared to $3,000 for a perpetual license or $5,000 as a hardware appliance. Customers who want to upgrade to 10 Mbps, 20 Mbps, or 50 Mbps can do so by paying the difference between their existing product and the higher-priced version, an option available in both types of software licensing but not with hardware.
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