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Peribit: Streamlining WAN Connections: Page 3 of 4

Networking Pipeline: Juniper's acquisition of NetScreen was pretty unexpected. Could similar acquisitions happen in this space, the application or network acceleration market? It seems like people are trying to solve this from a lot of different directions.

Graham: My theory is why that's occuring now -- partially it's because we're in an economic downturn and [companies are] trying to save money. But it's also partly because we've got stable technology for the first time in as long as I can ever remember. Think about networks; at 10/100, we've stabilized all the speeds. They had been changing for a while. PCs, laptops, servers are all now pretty stable. So IT teams are going back in, and saying, 'let's make the thing more efficient.' Let's get money out [of the network].

There are a lot of vendors coming into the acceleration space. Some are approaching at the network layer, some at the application layer. The key difference is: If you dissect the WAN, vendors like us work at the bottom, up into Layer 2. Other vendors are attacking protocols higher in the stack, application-specific things. We believe one of the issues is, if you step up to this layer [Layer 7], you're dealing with proprietary protocols, which change pretty fast, and are very complex. At the network level, it's standards-based, it's nice and easy, fairly simple. And you benefit all apps when you make a change at the network layer, versus one app [at higher layers].

One of the weaknesses of that approach is that it requires a box per app, and I don't think that's what IT wants.

Practically speaking, when you sell at this [higher] layer, you're selling to the apps guy, the storage guy, the security guy -- those vendors have a complex sell. We sell to the WAN guy, who's a pretty pragmatic individual, who says, 'I'm spending so much money, and if you can save me money, and the thing works, I'll put it in.'