WAN optimization appliance maker Riverbed Technology has taken the wraps off its Steelhead 7050 boxes, which sport the first solid state disks used in such an appliance as well as 10 Gigabit Ethernet ports on the data center side and over 1 Gb/sec of WAN bandwidth on the wide side.
The Steelhead 7050s come in two flavors. Both support 1 Gb/sec WAN capacities, have four 10 GE ports, and are crammed into a 3U rack-mounted chassis. The Steelhead 7050-L can support 75,000 TCP connections on the data center side and has 2.24 TB of raw SSD capacity (14 drives at 160 GB) and another two 300 GB hard disks (for data logging). The net-net is that the 7050-L appliance has 2.2 TB of storage capacity for data that comes and goes between WANs and LANs and is used by the optimization algorithms to reduce the bandwidth required to send data over the WAN between data centers or data centers and remote offices as well as to accelerate the performance of applications that run over WAN links.
The SSDs employ a RAID-like striping technique called FTS (short for fault tolerant storage) so the scratchpad data used by the optimization algorithms is protected as it is being chewed upon. Both the SSDs and hard disks in the 7050-L are 2.5-inch units, and the 7050-L chassis has 16 front-swappable disk slots. The Steelhead 7050-L also has 32 GB of its own main memory for running the RIOS operating system and its WAN optimization routines and four PCI-Express peripheral slots for the 10 GE links.
The 7050-M can support up to 100,000 simultaneous TCP connections on the data center or branch office side and has 30 disk slots - 28 for SSDs and two for disks for data logging. The 7050-M also has 48 GB of main memory.
Compared to the prior Steelhead 6050 appliances in the same category, these boxes have three times the throughput and twice as many TCP connections. (The company did not provide list pricing, but says it is charging a third the price of its competitors for the 7050-M). While these 7050 appliances as fast, they have nothing on the Interceptor 9350s announced in October 2009, which allows for appliances to be clustered together to deliver as much as 12 Gb/sec of WAN bandwidth and to support as many as 1 million TCP connections.
The two new Steelhead 7050 WAN optimizers will be available before the end of the first quarter.
According to Nik Rouda, director of marketing at Riverbed, the company is positioning the new Steelhead 7050s to be used as a means to provide remote offices with data replication and disaster recovery across the WAN back to the data center, where processes for backing up and archiving PCs and servers can be automated and data can be consolidated. The 7050s have enough oomph to be used to optimize the data replication for disk-to-disk disaster recovery setups, where remote offices store replicated application and data files used by mission critical application back in the data center.
Last week, Riverbed reported sales in the fourth quarter of $113m, with product sales up 15.2 per cent to $77.6m and support and services revenues up 42.1 per cent to $35.3m. While the company's gross profit managed to grow by 23.5 per cent to $85.1mm sales, marketing, research, development, and back office costs all rose, and it shelled out $4.6m in costs related to the acquisition of Mazu Networks, which drove net income down to a paltry $932,000 from a $23.3m net income in the year-ago quarter.
For the full 2009 year, Riverbed's sales were up 18.2 per cent to $394.1m, but net income has fallen by 33.2 per cent to $7.1m.
Riverbed might be the market leader in WAN optimization, according to Gartner, during 2009, and it might have 7,300 customers, but Wall Street clearly wants Riverbed to either wring more profits out of its products, make more sales to pull more to the bottom line, or cut costs somehow to get more solidly in the black ink during 2010. More significantly, WAN optimization is getting traction in conjunction with virtualized server and desktop environments, the latter of which looks pointed to go mainstream late this year or maybe early next year.
On a non-GAAP basis, revenue was up 10 per cent sequentially, which is pointing in the right direction. Riverbed ended 2009 with $325.7m in cash and equivalents, which means it can ride out some economic storms as well as make more acquisitions to bolster its top and bottom lines too. The again, with a $1.7bn market capitalization, it would not be surprising to see a hardware wannabe with some data center aspirations - I am thinking of Oracle - or a network player like Hewlett-Packard or maybe even a data center player like IBM decide to snap up Riverbed and add another arrow to their IT quiver.
Riverbed's stock has been trending up since the bottom fell out of the economy in 2008, and while it has more than doubled since early 2009, Riverbed's shares, which are flirting with $25 a pop, are about half of their pre-meltdown peak of just over $50. In terms of the proportion of revenues to market capitalization, Riverbed's numbers do not look out of whack. Provided there are future profits to be had in WAN optimization, of course. ®