Riverbed pumps up software with Zeus, Aptimize buys

US sales 'simply on fire' in Q2

WAN optimization appliance maker Riverbed Technology turned in a very good second quarter yesterday and decided to blow some of its cash hoard buying two companies to pump up the applications that run on its Steelhead and other appliances.

The first company that Riverbed is snapping up is Zeus Technology, the maker of traffic shaping and load-balancing software based in Cambridge in the United Kingdom. Zeus was founded in 1995, and got its start with a very high performance web server. Nearly a decade later, web servers were not very good at generating money, so Zeus expanded out to traffic management. Zeus dabbled a bit in hardware appliances a few years back, but has since focused on selling virtualized software appliance versions of its Zeus Traffic Manager, which just came out with a 7.3R1 release in June. The virtual traffic manager runs on ESXi, Xen, Hyper-V, and KVM hypervisors and have been installed by 1,500 customers worldwide.

Interestingly, Rackspace Hosting chose Zeus Traffic Manager as the load balancer in its compute cloud back in April, and Riverbed wants to get a piece of this cloud action and hence is shelling out big bucks to buy Zeus. The British software company also sells Global Load Balancer, a tool that does workload balancing across multiple data centers and public clouds, and Multi-Site Manager, a performance management tool for distributed applications that span multiple data centers.

Under the deal announced by Riverbed yesterday after the market closed, Riverbed is paying $110m in cash plus $30m in additional cash if Zeus makes revenue and profit targets in the 12 months following the closure of the acquisition. Jim Darragh, who was brought in earlier this year to be CEO at Zeus, will stay on at Riverbed and manage Zeus as a business unit. This unit will continue to be based in Cambridge, and it is expected that most of the company's 91 employees will stay on. Zeus is privately held and raised three rounds of venture funding in the prior decade from Scottish Equity Partners and DFJ Esprit.

Riverbed said in a statement that it expected the Zeus acquisition to be neutral to its earnings in the second half of 2011 and that it would boost the bottom line in 2012. The company generated around $16m in revenues under UK accounting rules in the prior 12 months, according to Randy Gottfried – Riverbed's CFO – who talked about the deal on the conference call with Wall Street to go over Riverbed's second quarter financial results.

The other company that Riverbed swept away yesterday was a New Zealand firm with 10 employees called Aptimize, which does web content optimization. The company's Website Accelerator (abbreviated to WAX because marketeers do that sort of thing) works with the Apache or Microsoft IIS web server (and no doubt soon with the Zeus web Server). The tool looks at a web page and reorganizes the content so a web browser doesn't have to make so many roundtrips back to the web server to load a page. With dozens and dozens of elements on a page, reconfiguring the web pages on the fly can reduce load times by a factor of four. This optimization does not change the web applications one bit, so you don't have to modify your code. All of the mishing and mashing and reorganizing takes place between the web server and the browser, and both are oblivious to what WAX is up to.

WAX also works in conjunction with content delivery networks, which generally optimize network performance but don't change the web content. This is important, since Riverbed in May just announced a partnership with Akamai Technologies to create a shared cloud optimization platform that mixes Riverbed's Steelhead WAN optimization with Akamai's CDN service.

Aptimize is based in Wellington, but Riverbed said it planned to relocate its 10 employees to its San Francisco offices. Aptimize has over 150 customers. Co-founder Ed Robinson is expected to stay on as general manager of Riverbed's new Web Content Optimization group, and his co-founder Derek Watson, currently chief technology officer, will stay on as well. Financial terms of the Aptimize deal were not announced.

Making money hand over bits

One of the reasons why Riverbed can afford to buy Zeus and Aptimize is that is it making money. In the second quarter ended in June, Riverbed posted sales of $170.3m, up 34.9 per cent compared to the year-ago period. Product sales rose by 38.2 per cent to $116.8m, while support and services revenues were up by 28.1 per cent to $53.4m. Riverbed's net income for the period rose by 72.2 per cent to $11.3m, and the company exited the quarter with $611.1m in cash and equivalents.

WAN optimization product sales were up 36 per cent in the quarter, according to Gottfried, and represented 94 per cent of product revenues. The new Cascade network performance management tool accounted for the remaining 6 per cent of product revenues, but is growing at 75 per cent compared to NPM products from a year ago. The vast majority of Riverbed's product sales (94 per cent) came through its distribution partners, and monster IT distributor Arrow Electronics accounted for 15 per cent of product sales for Riverbed in Q2.

Jerry Kennelly, Riverbed's CEO, said in the call that product sales in the United States in the second quarter were "simply on fire", up 68 per cent compared to the year-ago period. He added that Asia did well, but that Riverbed and its partners had some execution issues in Europe, particularly in Germany.

Looking ahead to the third quarter, Riverbed expects to book sales of between $184m and $189m in the third quarter, with somewhere between $2m and $3m coming from a partial quarter's sales from both Zeus and Aptimize. Riverbed is projecting that Zeus will generate around $20m in the first year of its ownership by Riverbed. ®

Other stories you might like

  • Prisons transcribe private phone calls with inmates using speech-to-text AI

    Plus: A drug designed by machine learning algorithms to treat liver disease reaches human clinical trials and more

    In brief Prisons around the US are installing AI speech-to-text models to automatically transcribe conversations with inmates during their phone calls.

    A series of contracts and emails from eight different states revealed how Verus, an AI application developed by LEO Technologies and based on a speech-to-text system offered by Amazon, was used to eavesdrop on prisoners’ phone calls.

    In a sales pitch, LEO’s CEO James Sexton told officials working for a jail in Cook County, Illinois, that one of its customers in Calhoun County, Alabama, uses the software to protect prisons from getting sued, according to an investigation by the Thomson Reuters Foundation.

    Continue reading
  • Battlefield 2042: Please don't be the death knell of the franchise, please don't be the death knell of the franchise

    Another terrible launch, but DICE is already working on improvements

    The RPG Greetings, traveller, and welcome back to The Register Plays Games, our monthly gaming column. Since the last edition on New World, we hit level cap and the "endgame". Around this time, item duping exploits became rife and every attempt Amazon Games made to fix it just broke something else. The post-level 60 "watermark" system for gear drops is also infuriating and tedious, but not something we were able to address in the column. So bear these things in mind if you were ever tempted. On that note, it's time to look at another newly released shit show – Battlefield 2042.

    I wanted to love Battlefield 2042, I really did. After the bum note of the first-person shooter (FPS) franchise's return to Second World War theatres with Battlefield V (2018), I stupidly assumed the next entry from EA-owned Swedish developer DICE would be a return to form. I was wrong.

    The multiplayer military FPS market is dominated by two forces: Activision's Call of Duty (COD) series and EA's Battlefield. Fans of each franchise are loyal to the point of zealotry with little crossover between player bases. Here's where I stand: COD jumped the shark with Modern Warfare 2 in 2009. It's flip-flopped from WW2 to present-day combat and back again, tried sci-fi, and even the Battle Royale trend with the free-to-play Call of Duty: Warzone (2020), which has been thoroughly ruined by hackers and developer inaction.

    Continue reading
  • American diplomats' iPhones reportedly compromised by NSO Group intrusion software

    Reuters claims nine State Department employees outside the US had their devices hacked

    The Apple iPhones of at least nine US State Department officials were compromised by an unidentified entity using NSO Group's Pegasus spyware, according to a report published Friday by Reuters.

    NSO Group in an email to The Register said it has blocked an unnamed customers' access to its system upon receiving an inquiry about the incident but has yet to confirm whether its software was involved.

    "Once the inquiry was received, and before any investigation under our compliance policy, we have decided to immediately terminate relevant customers’ access to the system, due to the severity of the allegations," an NSO spokesperson told The Register in an email. "To this point, we haven’t received any information nor the phone numbers, nor any indication that NSO’s tools were used in this case."

    Continue reading

Biting the hand that feeds IT © 1998–2021