UPDATED 12:00 EDT / SEPTEMBER 16 2016

NEWS

The networking revolution: Riverbed CEO speaks out | #GuestOfTheWeek

This week, Riverbed Technology, Inc., a leader in networking that established itself on Wide Area Network (WAN) optimization, held its Riverbed Disrupt event in New York City. During the event, the company showcased its expanding line of solutions for software-defined IT and highlighted a new product that the company said will revolutionize networking — SteelConnect, an application-defined SD-WAN solution.

Leading up this new networking revolution is Jerry Kennellychairman and CEO of Riverbed Technology. He recently sat down with Dave Vellante (@dvellante) and Stu Miniman (@stu), cohosts of theCUBE, from the SiliconANGLE Media team, during the Riverbed Disrupt event to talk about taking his company private and his expectations of growing the company to a $5-billion revenue-generating Initial Public Offering (IPO).

This week theCUBE features Kennelly as its Guest of the Week.

A quick ascension

As a startup company, Riverbed experienced rapid growth in the networking industry. During the interview, Vellante asked Kennelly about the company’s fast-paced assent. Kennelly responded by discussingd the go-to-market atmosphere in 2004.

“We were the true unicorn. The original definition of ‘unicorn’ was a company that had, not a billion dollars in valuation, but a billion dollars in revenue on its own without acquisitions within 10 years or less. You can count them on two hands, the companies that accomplished that, and Riverbed is one of those companies,” Kennelly said. “We basically shocked the world when we came to market in 2004 with our technology that overcame what people thought was the impossible barrier of speed to light limit on network transfers across global networks.”

He continued: “We grew like crazy, but these things are cyclical, and we did have a growth slowdown. So we hit a billion and sat there for a year or two, and Wall Street doesn’t like that, so we decided to do a reset. We took the company private a year and a half ago and it’s been … great ever since then.”

The speed of light problem solved

Vellante followed up by acknowledging that Riverbed did solve the speed of light problem. Kennelly explained the principle.

“It’s interesting. People think there is a virtual world. The truth is there’s no such thing as the virtual world, there’s only a physical world. What people think of as ‘virtual’ is the digital world, and digital is electrons and electrons are part of the physical world. So every trip in the physical world has two costs: a cost of time and a cost of dollars,” Kennelly said. “For me to fly here from San Francisco … it cost me five hours of my life and $1,000 for my ticket on United Airlines. So a packet in the networks is exactly the same thing. An electron has to make that physical trip. Its cost in time is a hundred milliseconds, which is the latency of the trip, and the cost in dollars is what I have to pay AT&T for my bandwidth to send that packet across the network.”

He added: “We came up with a technology that dramatically reduced the cost in time and the cost in dollars in a way the world had never seen before, basically by spoofing the speed of light … and that just revolutionized people’s ability to deploy networks globally.”

Big revenue expectations

Kennelly then talked about the company’s recent pivot.

“At the end of the day, what we did was not mainstream networking. It was on the side of networking. So what we have announced today is our pivot in the mainstream global networking with an incredible product. Over the years, our approach, the way we were able to spoof the speed of light, was by sending packets at Layer 7 [networking services], the application layer,” he explained. “Most traditional companies are using Layer 2 and using hardware Layers 2 and 3. We’re using Software Layer 7 as the application. Our application-aware knowledge is very key to this new generation of mainstream networking products, and SteelConnect will revolutionize the way people deploy branch networks.”

Kennelly went on to explain: “It’s a big move for us. It’s a fundamental move … we’re going to go up again. I looked at our future before this product, and we’re very profitable. … Now with SteelConnect, I can start thinking about doing two billion, three billion, four billion; I can now envision Riverbed as a $5-billion-revenue company … thanks to this new product line.”

No need to rip and replace

During the interview, Kennelly spoke in detail about the company’s new technology and why it is the perfect storm for growth opportunities. Miniman commented that what Riverbed is doing is more complex than software-defined networking. Kennelly described how the enterprise can use the solution to easily deploy hybrid environments.

“What we are doing is you don’t have to rip and replace your router. You can use our SD-WAN technology as an overlay management on top of your existing routers, just leaving them as they are but getting the advantages of centralized orchestration and management. Or you can pull your old ones out and use our device. Either way, it is much simpler; it’s more secure for you,” he said.

Kennelly continued: “And the idea of what’s actually changed over time is that the advent of cloud computing is that you had the corporate headquarters as the data center and all the branches connected to corporate headquarters. In the cloud world, the corporate headquarters is just another branch because the data center is somewhere else; it’s in the cloud.”

Other topics Kennelly addressed during the interview were the private equity world he is in and how his company is focused on revenue growth and profitability. He discussed partnerships, the ecosystem and the company culture.

Watch the complete video interview below to hear more from our Guest of the Week, and be sure to check out more of SiliconANGLE and theCUBE’s coverage of Riverbed Disrupt.

Photo by SiliconANGLE

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