HP in Deal With Riverbed, Sources Say

When Hewlett-Packard Co. (NYSE: HPQ) releases a massive storage product refresh later this month, wide-area file services (WAFS) will be part of it. And it's likely that part will come from Riverbed Technology Inc.

The OEM deal, unconfirmed and uncommented on by either company at press time, appears to be a kind of open secret. Hints of it surfaced in a financial note on Brocade Communications Systems Inc. (Nasdaq: BRCD) by analyst Thomas Curlin of RBC Capital Markets last week. Commenting on Brocade's recent investment in WAFS vendor Tacit Networks Inc. (see Brocade Invests in Tacit), Curlin had this to say: "Also of note, as WAFS has quickly emerged as a strategy technology within vendor portfolios contacts report HP already selling and close to announcing an agreement with one of the other remaining WAFS vendors to resell their technology within HP solutions."

HP has told at least one analyst that WAFS will be part of a major EVA product upgrade set for rollout May 16 (see HP Plans EVA Facelift). This source and at least one other, who asked not to be named, say Riverbed is virtually the only likely candidate.

Here's the rundown, from their viewpoint: Tacit's out, since Brocade would probably not have cut a deal with Tacit if it was likely to wind up competing against one of its strategic OEMs for the same product. HP also is unlikely to compete against Cisco Systems Inc. (Nasdaq: CSCO), whose $82 million acquisition of Actona late in 2004 gave it WAFS capability (see Cisco Acts on Actona). [NOTE: The Cisco situation could change; see below.]

The remaining unattached WAFS vendors include DiskSites Inc. and FineGround Networks, both of which have yet to make an industry impact. Guess who's left?"Riverbed has solved WAFS for CIFS, Exchange, and SQL server [all Microsoft products]. HP is a strong Microsoft partner," says one of the industry sources cited above. Add that to Riverbed's recent broad hints of a big OEM deal, and the ducks line up.

The rumored Riverbed/HP agreement is the latest evidence that all networking vendors in the enterprise market are looking seriously at techniques for streamlining remote-site data delivery. Besides WAFS, these techniques also include WAN optimization, of the kind recently acquired by Juniper Networks Inc. (Nasdaq: JNPR) through its $337 million planned purchase of Peribit Networks Inc. (see Peribit Deal: More to Come).

WAFS gear typically tweaks file-level protocols like CIFS or NFS to shorten response times over the WAN. WAN optimizers work on the transport protocols underlying data and file transfer. But most products, including those from Riverbed, combine both in some measure.

While frequently billed as a WAFS appliance, Riverbed's Steelhead product in fact works much like a WAN optimizer. It tweaks TCP to reduce protocol "chattiness" caused by repetitious packet exchanges. At the same time, it offers application-specific algorithms to reduce the overhead caused by Windows, HTTP, and MAPI traffic. The Steelhead appliance also reduces file transfer times by sending a reference to a file in place of the actual file.

Riverbed's Steelhead is based on Linux, which at least one source says could make it more scaleable than products based on other operating systems.One unknown is how a potential acquisition of Riverbed might affect any deal it has with HP. At last week's Interop tradeshow, there was talk that Riverbed may be in Cisco's sights (see Cisco Prowling WAN Optimization?). Whatever happens, sources say Riverbed should have an interesting future.

Mary Jander, Site Editor, Byte and Switch