Silver Peak's Odd Approach To SoHo Pricing

Today Silver Peak announced the new NX-1000, a WAN optimization appliance the company is positioning for small and home offices (SoHo). While the product has a form factor that will fit in the spare bedroom where your telecommuters work, its $4,995 price tag is aimed more at Wall Street than Main Street. "I think it's funny they say they are targeting the home office with this device," says Michael Biddick, an analyst at InformationWeek Analytics. "At $5,000, I don't know too many people who would opt for that."
 
One explanation for the price is the product's feature set. The product can scale from 256k to 4Mbits/s of WAN capacity. That's great, but how many SoHo sites do you know that have a dedicated 4Mbits/s? For that matter, how many SoHo sites have dedicated lines at all? The appliance can also support up to 8,000 simultaneous flows, which is good for an office site with hundreds of employees, but is overkill in smaller environments.

Silver Peak did get the form factor right, particularly for small offices. A rack isn't always an option in SoHo environments, so the NX-1000 comes as a 1U chassis with 8.5" depth. It offers rack, wall and desktop mounting options, and its 40dBA noise level means that IT managers can place this appliance under a user's desk without having to issue earplugs.

Silver Peak says its newest product is accurately priced. "The NX-1000 is priced competitively with the smallest appliance offered by the market leader, Riverbed," says Jeff Aaron, vice president of marketing at Silver Peak. Riverbed's smallest WAN optimization appliance is the Steelhead 250 series. "If an enterprise has bought into a network approach to WAN optimization, this is an extremely attractive solution," says Aaron. Perhaps, but all of the WAN optimization players, Silver Peak included, may well find themselves challenged by more affordable, more easily deployed virtual appliances in the branch office. Citrix's NetScaler VPX, for example, is rated at 10Mbits/s and costs $2,000. Blue Coat's ProxySG Virtual Appliance starts at $1,100 a year.

Organizations can drop a virtual server out in their small offices and have them provide all of the requisite branch services. Caveats apply, of course, not the least of which are the requisite performance and features analyses that always complicate comparisons of WAN optimizers, but with entry of virtual appliances, IT pros have options. They must carefully evaluate whether the appliance model is the right fit for small and home offices.