Silver Peak Pockets $17M

Silver Peak Systems, a startup swimming in a sea of bigger WAN accelerator competitors, picked up $17 million in funding today. (See Silver Peak Raises $17M.)

Silver Peak's second funding round in a year -- and third overall -- brings its total to $42 million, as it tries to cash in on large firms' desire to improve application performance in branch offices. (See Silver Peak Secures $13M.)

The WAN acceleration market is growing fast, but Silver Peak could be running out of time to catch the wave. (See Insider: Trio Takes DR to Next Level.) The startup competes with public companies Blue Coat, Cisco, Citrix, F5 Networks, Juniper, Packeteer, Riverbed, as well as Expand Networks and a host of smaller vendors.

Analyst Joe Skorupa of Gartner Group says Silver Peak's WAN acceleration platform still lacks an affordable branch office product. Skorupa says Silver Peak's high throughput capabilities have won it customers for replicating data between data centers, but it is too expensive for large companies with many remote offices. Silver Peak's remote office device costs around $10,000, which is three or four times the price of some of its competitors.

"They don't have a good solution for the branch office," Skorupa says of Silver Peak. "You need to be at around $2,500 for a strong branch office product. "If you're going to consolidate 300 branches, a few thousand dollars [per box] means a lot. Silver Peak's focus has been where high throughput matters and average selling price is less of an issue because you only need a couple of boxes."