Riverbed Hedges IPO Bet

Riverbed Technology's addition of NetApp to a roster of partnerships that includes HP, McData, and NEC looks to be an ongoing effort to shore up momentum for its IPO -- or something else.

Riverbed's partnership with NetApp, announced today, is just a "reference selling" agreement so far. (See Riverbed Joins NetApp.) But Riverbed hopes it will evolve beyond that.

"The first step is [NetApp] acknowledging us as a viable path for customers," says Keith Zubchevich, VP of business development at Riverbed. "It's a matter of how quickly it takes off. At that point, both companies look at the business aspects."

One of those aspects could be an OEM partnership of the kind Riverbed has with HP, McData, and NEC. (See Riverbed, NEC Sign OEM, Riverbed Licenses Tech to HP, and McData & Riverbed: A Rumored Pair.) It's also likely Riverbed is shoring up its revenue potential in light of plans to go public. (See Riverbed Makes It Official.) And some in the industry have speculated Riverbed could be casting about for an acquirer, just in case its IPO plans don't materialize.

The rate of consolidation in the WAN optimization market suggests that Riverbed, which has held out for its independence so far, may wind up in a vulnerable position if it doesn't at least consider the possibility of a merger. (See Users Rally Round Remote Solutions, Citrix Grabs Orbital Data, Packeteer Picks Tacit, Expand Snaps Up DiskSites, and F5 Hits Accelerator.)At least one analyst, though, thinks Riverbed's partnership strategy is aggressive because the firm really wants to go public. "My gut is they want to go public, so it would take something pretty special to get bought," says the analyst, who asked not to be named.

Meanwhile, though, Riverbed faces a number of unanswered questions emanating from the complicated series of acquisitions that characterize this market. Will Brocade's acquisition of McData, for instance, affect Riverbed's deal with McData -- in light of Brocade's exclusive OEM agreement with Packeteer/Tacit?

Brocade officially declines to answer. "Until the deal is closed, we continue to work as separate companies," says Brocade spokesperson Leslie Davis. "[It is] premature to speculate related to relationships via the combined entities. Through the integration planning we will be evaluating all of these issues."

At least one Packeteer user isn't worried. "We are aware of the Brocade purchase and are currently customers of both Brocade and Packeteer," writes Jerome Waldron, CIO of Salisbury University, in an email. (See NEW! Salisbury University.) "It would be nice to know what Brocade plans to do, however if there is no clear path outlined we will likely upgrade with Packeteer. We have been through the merger/acquisition process with other vendors... Typically there is some realignment of products and resources, but this often takes a few years. I have learned not to overreact to mergers/acquisitions. Time will tell."

Riverbed's Zubchevich says prospective customers that may have been caught off guard by the Brocade/McData news have nonetheless gone ahead with plans to adopt the Riverbed/McData solution. And he thinks if it comes to a choice, Brocade will pick Riverbed. He looks at it this way: Brocade and McData are merging to confront Cisco, and Riverbed's record against Cisco has been "pretty dominant." Hence, when the time comes, Riverbed will win out.A spokesman for Packeteer doesn't have much to say except that, for now, the exclusive deal with Brocade stands.

Regardless of whether Riverbed goes public or gets acquired, it seems the NetApp partnership is still a gleam in Zubchevich's eye. "At this point there is no technology partnership," writes a NetApp spokesperson in an email today. "NetApp partners with other WAN optimization vendors including Citrix (Orbital Data), Expand Networks, F5 Networks (Swan Labs), Juniper Networks (Peribit), NetEx, Packeteer and others."

Mary Jander, Site Editor, Byte and Switch