Feeds

Swollen-bellied Riverbed spears trout of doubt: Opnet buyout blues over

Offers up fresh Steelhead DX8000

Boost IT visibility and business value

Riverbed, the WAN optimising and cloud storage gateway biz, has announced a sparkling new Steelhead appliance and pretty shiny results as it recovers from digesting an acquisition. Which first? Let’s go for the revenues and earnings.

Fourth quarter 2013 revenues were $283m – satisfying growth compared to revenues of $262m in the previous quarter and $238m a year ago. Profits, though, were another matter. They were just $8m - 2.8 per cent of revenues - which contrasts to a 6-8 per cent margin in 2011 and 2012. The previous quarters saw profits of $3.8m and a year ago Riverbed reported $5m in profits. Things are getting better.

Revenues for the full year were $1bn, nicely up on the previous year’s $837m, but net income (profit) for 2013 was a loss of $12m. There had been a profit of $55m for 2012. Something went awry.

Three charts provide snapshot glimpses of the revenues and profit/loss picture. First, quarterly revenues and profit/loss to the end of 2013:

Riverbed results to end-2013

Click the pic to get bigger look.

Now let’s look at profits/losses as a percentage of revenue: this is revealing.

Riverbed net income as percentage of revenue

Something dreadful happened to net income after the third quarter of 2012, with a presaging of the problems in the first quarter.

Finally, the annual revenues and profits graph shows the overall perspective, with quarterly fluctuations, and illustrates Riverbed’s financial issues.

Riverbed annual numbers to 2013

The conclusions from these three charts?

  • Starting in 2012 there was a first quarter profits dip and the recovery in the second and third quarters wasn’t sustained with a small profit in the fourth quarter and then …
  • Two quarters of losses in the first half of 2013, a thin profit in the third quarter and slightly better one on the final quarter.
  • Annual revenues have been rising steadily but net income went awry in 2012 and turned into a loss on 2013. Cost controls simply fell apart in 2012 and still haven’t recovered.

Riverbed bought Opnet Technologies, a network traffic management company, for $1bn in late 2012, and the after-effects of integrating that acquisition have included relatively uncontrolled spending.

Riverbed founder, chairman and CEO Jerry Kenelly talked of the Opnet digestion problems in a November 2013 analysts' meeting, mentioning:

  • Big move – merging 700 people into 1800 people
  • Inherently challenging and costly
  • Still Recent – less than 1 year in total
  • 2 quarters “feet on the stree”,
  • Some impact from Government unrest
  • Largely complete as 2014 approaches

The company said WAN optimisation was becoming a commodity market (= lower margins) and so it redefined itself as a location-independent computing company in November last year – an attempt to break out of the WAN optimisation niche. Opnet is a key part of this.

The outlook for 2014 is brighter and Riverbed is now moving ahead again, with its new appliance part of that.

Brand new Steelhead

Kennelly said in November: “With Steelhead, SaaS apps like Microsoft Office 365 can be delivered up to 33 times faster while using 97 per cent less bandwidth.”

Steelheads are claimed to deliver up to 60x WAN performance acceleration and up to 99 per cent bandwidth reduction. They come in EX branch office connect versions, CX larger branch office and a data centre variants, and, now, a DX data centre-to-data centre box.

This is the Steelhead DX Edition 8000 Series, designed for use in datacenter-to-datacenter data replication. It features:

  • Up to 2 Gbit/s of optimised WAN capacity
  • Up to 10 Gbit/s of optimised LAN capacity
  • It optimises up to 10,000 TCP and UDP application flows
  • Optimisations for data replication applications such as NetApp SnapMirror and EMC Symmetrix Remote Data Facility (SRDF)

You can get a specsheet here (small pdf).

The Steelhead DX 8000 is available now. ®

Maximizing your infrastructure through virtualization

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.