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What Rich McBee’s Move to Riverbed Means for SD-WAN

Earlier this month, Mitel announced its long-tenured CEO, Rich McBee, would be stepping down, to be replaced by Mary McDowell, most recently of Polycom. This raised some speculation of where McBee would be going. Today, we got that answer as Riverbed announced that Mr. “acquisitions are in my blood” McBee would be its new CEO, replacing David Murphy, who took the helm when Paul Mountford stepped down. The Mountford news was earlier this month, so kudos to Riverbed for moving so swiftly.
 
I believe this is a great move for both McBee and Riverbed, as the SD-WAN industry is flush with vendors and badly needs some consolidation. At last count, I believe there were 62 SD-WAN vendors, which is a dizzying number and can bog down enterprise decision-makers that are trying to find the best one for their needs. The number of options should let McBee execute on a roll-up strategy and consolidate the market, similar to what he did with Mitel and unified communications.
 
A roll-up strategy could help Riverbed become a powerhouse once again. At one time, the company was the darling of Wall Street, and it seemed that every quarter they weren’t just winning, but were obliterating the competition, which included the mighty Cisco. Riverbed defined the WAN optimization market and was the runaway leader in the industry. However, it’s success in WAN optimization became its curse. The company had so much success that it was slow to pivot to SD-WAN. It now has a viable solution, but it’s a minority share vendor in a market with companies like Cisco, Silver Peak, and VMware. This is similar to the role Mitel was in when it had to take on Cisco, Avaya, and Microsoft in UC.
 
A rollup can bring some heft to the company and bring new capabilities, enabling it to compete better on a global scale. Below are some companies that McBee should put in his crosshairs:
 
  • FatPipe Networks was a pioneer in WAN performance and made the shift to SD-WAN several years ago. I first met with the company at SuperComm 2001, to give you an idea of how long they’ve been around. The company offers a wide range of WAN products, including SD-WAN, which is comprised of its MPVPN CPE and its Symphony orchestrator. It differentiates itself on its VPN and link aggregation with fine-grained traffic steering.
  • Barracuda was acquired by Thoma Bravo for $1.6B about two years ago. This might be a big purchase for Riverbed right now, but it would bring several best in class security capabilities. As SD-WANs matured, security became a bigger pain point. In the last round of end-user and VAR interviews I did, security was the top pain point to overcome for SD-WAN. The company has a strong next-generation firewall and VPN concentrator, both must-haves for SD-WAN.
  • Open Systems has been in business since 1990 and can be considered the most established SD-WAN vendor. The company was founded in Switzerland and spent much of the past 20 years growing its customer base in that country and other parts of Europe. Its strength lies in its lifecycle approach to security and has a number of capabilities, including firewalls, CASB, threat intelligence, EDR, and e-mail security. It also has an integrated NOC and SOC and analyzes data using AI to find breaches and/or performance problems. The sophistication of Open Systems could let Riverbed punch above its weight class in SD-WAN. The company is planning on doing a push into the U.S., so the timing might be right for an acquisition before the valuation goes up.
  • Cato Networks is a small Israeli based company that owns its own global backbone and has strong security capabilities, including a best in class threat hunting service. Because of the size of its network, Cato has had strong appeal from mid-market and enterprise customers that are faster to deploy than traditional telco services. Cato is one of a few advanced managed service providers that own their network, as opposed to just managing CPE.
  • Versa provides SD-WAN and security capabilities based completely on software, so it tends to get sold through providers like Century Link and Verizon. Riverbed’s recently announced SteelConnect EX is based on Versa, so a partnership with them is already in place. Versa has great management and analytics tools, enabling it to do things like MOS based steering to ensure high-quality voice. One knock against Versa is its weak WAN optimization capabilities, but that won’t be a problem for Riverbed, as it’s a market leader.
 
Other vendors McBee might want to consider include Aryaka, CloudGenix, Mushroom Networks, and BigLeaf Networks.
 
That should be a good starting point for Rich McBee, but I’m sure he has some vendors already in mind. Congratulations to Rich for jumping into the SD-WAN market, and I’m sure he’ll make it much more interesting.