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Packeteer's WAFS Wobble

Despite the growing hype around wide area file services (WAFS), WAN optimization specialist Packeteer is still waiting to reap the benefits of its Tacit Networks acquisition. (See Packeteer Announces Q3 and Packeteer Picks Tacit.)

In the vendor's Q3 results released last night, Tacit's iShared WAFS technology contributed $2.4 million of revenue, significantly less than the $3 million to $4 million expected by Packeteer.

Speaking on a conference call last night, David Cote, the Packeteer CEO, admitted that he was disappointed with the performance, which he blamed on a revenue shortfall in America and the assimilation of Tacit. "The integration and training of our sales teams and channel partners took more of Q3 than we had expected," he said.

Nonetheless, Cote was keen to put an upbeat slant on Packeteer's WAFS story and predicted fourth quarter iShared revenues of somewhere between $4 million and $5 million. "WAFS continues to be hot," he said. "This is a new exciting emerging opportunity."

Earlier this year, Packeteer threw down $78 million in an all-cash transaction for Tacit. (See Sources: Packeteer Eyeing Tacit and Packeteer Buys Tacit.) The move came less than eight months after the two firms entered a reseller arrangement to combine WAN optimization and WAFS wares. It was also Packeteer's second acquisition in this space, following its $16.5 million grab of Mentat in December 2004. (See Packeteer Gives Tacit Approval.)

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