Blue Coat: We Grow One Packet at a Time
Page 1 of 1
As enterprises become even more distributed and even more applications are delivered over an IP address, the need for more speed and application visibility becomes even more paramount.
It's quite a market opportunity for vendors, and Network equipment vendor Blue Coat Systems has a plan to capture a big chunk of it, thanks in part to its recent acquisition of Packeteer.
During a recent interview, Blue Coat CEO Brian NeSmith said he is confident that his new combined firm has what it takes to stave off the competition and be the leading vendor in the WAN acceleration and optimization market. At a time when vendors like Citrix, Cisco, Juniper and Riverbed are crowding into the same sector with a flurry of IP-analyzing products, Blue Coat's NeSmith finds himself on the hotseat.
But time on the hotseat could pay off here. Infonetics Research predicts that the WAN optimization market will be worth $1.2 billion by 2010.
"From a market standpoint what we're betting on is that customers will want to build a new layer of infrastructure on top of their IP network that we call application delivery," Brian NeSmith BlueCoat, President and CEO told InternetNews.com. "It's using storage and content and intelligently managing what's happening with users and applications beyond just simply building a bigger switch or fatter pipe."
A key part of Blue Coat's plan for application delivery is application visibility. That is the ability to actually see what is traversing an enterprise's data network, so that system administrators can make better decisions how to manage it.
The new cornerstone of Blue Coat's application visibility strategy is vested in its recent acquisition of WAN optimization pioneer Packeteer for $268 million.
Though the deal has already closed, there are still some operational issues that will take a few months to complete. After August 1st, the sales organization will be merged with the Blue Coat sales team. On November 1st, NeSmith expects to have fully integrated the two companies across all operational areas.
The Packeteer packetshaper platform, which NeSmith noted as the product from which Packeteer derives the bulk of its revenues, will be an area of strategic focus for Blue Coat. The packetshaper platform today is capable of recognizing 650 different applications and the plan is to expand that further.
"We want to evolve packetshaper to the point that if we can't classify the traffic then customers should be viewing the traffic as something that is not appropriate," NeSmith said. "We want to classify everything."
The plan then is to work on making packetshaper more interoperable with Blue Coat's proxySG acceleration technology to provide greater visibility.
"Once we know what the traffic is, we can figure out what do we want to do about it," NeSmith said.
With the acquisition and integration of Packeteer underway, NeSmith boasted that Blue Coat is now in a market leadership position.
"The combination of Blue Coat and Packeteer puts us at 40 to 50 percent larger than our next largest competitor Riverbed," NeSmith claimed. "They have 20 to 22 percent market share and we had roughly 20 percent and Packeteer had 10 percent so we move from tied to first to a clear leadership position."
NeSmith also shrugged off any new competitive threat from the partnered offering for application s+Akamai+Citrix+Link+acceleration between Akamai and Citrix. NeSmith argued Blue Coat doesn't compete against Akamai in the context of web optimization. In his view Akamai focuses more on business to consumer while Blue Coat is focusing on the Enterprise.
When it comes to Cisco and its WAAS (Wide Area Application Services) technology , NeSmith isn't worried about a competitive threat either. Cisco's WAAS was recently updated to support delivery of virtualized applications and also has the ability run a fully virtualized instance of Windows Server 2008.
"In the datacenter, I don't think virtualization is what we need to do," NeSmith argued. "The scale and the throughput required for the datacenter does not lend itself well to virtualization. So the story is we're not doing anything for virtualization with our products in the datacenter."
Beyond competitive threats that may come from other vendors, the other issue that Blue Coat may have to deal is the fact that bandwidth is growing. 100 Gigabit Ethernet (100GbE) is now being tested by carriers offering a 10x improvement over the current 10GbE that many enterprises use. Bandwidth alone however does not negate the need for WAN optimization and acceleration technologies according to NeSmith.
Even with a fatter pipe, it still takes time to travel distances and the way that applications work and the distances that applications travel have an impact. NeSmith argued that intelligent optimization and visibility solution can help improve delivery even in higher bandwidth environments.
"WAN optimization helps to resolve congestion and can be a trade off against bandwidth," NeSmith admitted. "However there are a lot of issues related to latency with application delivery that we can solve even with more bandwidth."