Back To The Future: Silver Peak CTO Retakes CEO’s Job

Silver Peak Systems, best known as a WAN optimization vendor, has gone back to the future, naming original CEO and founder David Hughes, most recently CTO, as the new CEO. It’s a somewhat ironic development as he is replacing Rick Tinsley, who he convinced to come out of retirement to become CEO back in 2004, shortly after Hughes started the company.

“It’s a natural transition at this point as the company moves into its second phase,” said Hughes. The company is stronger than ever, well-positioned and committed to its vision. “We are revolutionizing the WAN optimization market, and in the process, have transformed ourselves into a software-driven business.”

Almost a decade ago WAN optimization was a really exciting opportunity but now the excitement is all about using software to transform something that was hardware centric, he said. “We’re opening up a whole new range of opportunities… and we can move quickly to take advantage of that.”

The need for network optimization is still growing. Internet-generated broadband traffic will increase approximately 50% year over year on fixed networks and 100% on mobile networks, while cloud-based network traffic will grow 600% by 2016. A recent Forrester study, commissioned by Silver Peak, found that 66% of IT professionals believe their ability to replicate data is constrained by limited bandwidth, while 72% would like to move more data than they currently do.

The WANop market is at an inflection point, according to data from TRAC Research. Hardware appliances account for 64% of the market, with 26% planning to deploy them. Currently only 25% use virtual appliances, but 42% plan to do so, while 26% use software clients and 39% plan to deploy them. From a services perspective, 19% use a managed service provided by a telecom carrier, while 17% plan to deploy, and 8% currently use a cloud service, but 38% plan to take to the clouds.

“Although virtual appliances are rapidly gaining traction in the Application Delivery Controller and WAN Optimization markets, there are optimized performance advantages, such as for SSL and IPSec offloading that will continue to buoy sales of physical devices for years to come,” said Casey Quillin, Senior Analyst of Data Center Appliance Market Research at Dell’Oro Group. “Virtual appliances are a nascent and fast-changing market. We foresee higher-end, higher-priced products that make networks smarter becoming more prevalent.”

Dell’Oro Group believes most of the revenue growth in the WAN optimization market will be driven by virtual appliances, said Hughes Their recent report notes that “virtual WANOP appliances provide greater flexibility in application optimization and data access in the cloud as well as between disparate data centers and branch offices.”

Last quarter over half of the units Silver Peak sold were virtual, he said. “Customers prefer Silver Peak’s software because it radically reduces deployment complexity and lowers the total cost of ownership by more than 50% when compared to competitive hardware-based offerings.”

Here’s the report card on Silver Peak from the recent Gartner Magic Quadrant for WAN Optimization Controllers (April 29, 2013):

Silver Peak’s WOC capabilities are delivered through the vendor’s physical NX appliances and VX/VRX virtual appliances. Silver Peak has aggressively championed virtual appliance and flexible deployment models to increase its solution portfolio. Consider Silver Peak for all data center replication projects and where its cost-effective virtual WOC solution meets your application profile.

-Strengths: Silver Peak maintained its focus in data center storage replication, where it’s strong and backed up by segment-leading products with top-tier performance, and good strategic alliances with data center infrastructure companies, such as EMC, Hitachi and Dell; Silver Peak has pioneered the virtual marketplace with the first self-service marketplace, offering free trials as well as purchases of its entire vWOC product family’ Silver Peak has combined products, pricing, packaging and tailored deployment models to allow storage administrators to easily deploy WAN optimization specifically for remote replication workloads without a requirement to reconfigure the routed network; the company has a large portfolio of appliances, with flexibility on deployment options (hardware and virtual appliances) and pricing (subscription, perpetual, pay as you grow and free); and, Silver Peak optimizes all IP traffic. Specific enhancements and certifications for SRDF, Brocade FCIP and EMC VPLEX are available.

-Cautions: Silver Peak is still lacking in capabilities for home office and mobile users (no SoftWOC) as well as lacking application-specific optimizations (such as latency mitigation for MAPI and Citrix ICA/HVD); virtual appliances are not a good fit for many emerging markets where Silver Peak wants to expand; the company lacks an offering for video on demand that incorporates stream splitting and remote-office file caching/streaming to offload the network and the origin server; and, despite a small, but growing, list of channel partners, there is no significant service provider offering.

 

DISCLAIMER: Silver Peak is a client of Wordslingers Ink.

 

 

Author: Steve Wexler

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2 Comments

  1. So did Tinsley get fired or what? Why is this a natural progression? Does progression mean the company is going down?

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    • Hughes and Silver Peak aren’t saying what Tinsley will be doing, but as he was “brought out of retirement” to run the company 8 years ago, and by all accounts the company is doing well, one could assume he’s going back to retirement.

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