Riverbed Leaves Others in its Wake for Gartner Magic Quadrant for WAN Optimization Controllers

Gartner has released  their Magic Quadrant for Wan Optimization Controllers ID:G00219270.  Only three companies made it into the Leaders portion of the magic quadrant, Riverbed, Blue Coat Systems, and Silver Peak.  Gartner.  Riverbed led the other two companies by a great deal from the perspective of Completeness of Visionand Ability to Execute.  Silver Peak and Blue Coat were practically on top of one another with Citrix close by in the Visionary area of the Magic Quadrant.  and Ability To Execute.

Cautions for Blue Coat included stagnant revenue, being late with features, and management churn.  This makes it sounds as if their acquisition by Thoma Bravo for $1.3 billion in mid February 2012 has yet to payoff.  Cautions for Silver Peak Systems included lacking application specific optimization and lacking in some capabilities for mobile and home office workers.

Gartner praised riverbed for having the “broadest set of capabilities in the industry” and being one of the most innovative companies in the market.

Riverbed is currently trading at around $16.  Far off its high of around $30 in March 2012.  It bottomed out around $13.30 in July. Riverbed's financial report published in early February was mixed.  Total GAAP revenue for Q4’12 was $237 million, up 9% compared to the third quarter of fiscal year 2012 (Q3’12)   for the full year 2012, GAAP revenue was $837 million, up 15% compared to 2011 GAAP net income for Q4’12 was $5 million.  This compares with $20 million, in Q4, 2011.   

However, Riverbed  captured more than 52% share of the worldwide Advanced Platform WAN optimization market share based on vendor revenue for the third quarter of 2012 per Gartner’s according to Gartner’s  report titled “Market Share: Application Acceleration Equipment, Worldwide 3Q12” December 2012.

 http://www.riverbed.com/us/company/news/press_releases/2013/press_020713  

So the revenue trends are in the right direction.  Now about that reduction in net income?

Overall, with respect to their main competitors in the Magic Quadrant.  Their position is golden compared to Silver Peak.  Their growth in 2012 probably has Blue Coat singing the blues.  Riverbed is well positioned for 2013. 

How Do You Use A Gartner Magic Quadrant?

The below is from a Research Methodologies piece on utilizing Magic Quadrants.  Too often, a pic of the quadrant will make its way onto a slide deck with no explanation.

Clients use Magic Quadrants as a first step to understanding the technology providers they might consider for a specific investment opportunity.  Keep in mind that focusing on the leaders' quadrant isn't always the best course of action.  There are good reasons to consider market challengers.  And a niche player may support your needs better than a market leader.  It all depends on how the provider aligns with your business goals.

 The five other companies in the WAN Optimization Controllers Magic Quadrant are probably pleased about the above.

http://www.gartner.com/technology/research/methodologies/research_mq.jsp

Secureworld expo 2012, Decrypting the Mayan Code - Santa Clara Day 1 Musings

Day 1 of secureworld expo 2012, Decrypting the Mayan Code, in Santa Clara (Bay Area) was a lightly attended event.  None of the smaller sessions I    attended on Day 1 were more than half-full.  The afternoon panel discussion was full, however.  There were more than sixteen sessions on Day 1, a combination of open sessions, 2-Day   conference attendees’ sessions, and invitation only session.  A sense of déjà vu over a past RSA San Francisco event.  The theme of the conference,   “Decrypting the Mayan Code” 

Some Observations

• Opening   Keynote – PCI in 2012 and Beyond.  More of the presentation was spent on promoting the organization than where PCI was heading.  I learned that the speaker has a hearing-impaired dog.

• Check Point Software - Security Blueprint talk -   Good talk about Check Point’s security map without doing a technology deep dive.  Check Point delivers their technology “your way”, depending on whether you want an appliance,   VMware, or you have fully imbibed the private or public cloud kool aid.  They stated that their solutions provide comparable features, functions, performance, regardless of the form factor you purchase or license their technology.

• RSA - Authentication, Addressing a Changing IT Environment talk -   Quick overview of some authentication alternatives.  Brief mention of “issues” RSA had in the past year with theft.  Other companies involved with authentication were in the audience (and identified themselves).

• Panel discussion – BYOD; Laptops, Smartphones, Tablets, Oh My!  (Absolute, Air-Watch, Appsense, Good Technology, RSA ) – A good discussion.  Well attended.  The consensus was that BYOD has taken off and there is no going back.  Now, it is a matter of protecting the data.  Members of the panel felt that  t there is an obvious positive ROI to implementing BYOD within the company.  Disagreement as to whether the growth has come from the masses demanding (or just doing) this, or from the executive offices demanding it.  One company more or less recommended the 80/20 suggestion for implementation.  Namely, that you could get 80% of what your company needs with 20% of the effort.  Much of the discussion used the briefcase motif.  If the employee owns the briefcase, how can  you justify the company owning the lock if there is  personal information in the briefcase?  The suggestion; consider the company having a smaller briefcase within the personal briefcase.  The company then would own  that briefcase, the lock, the data, and the right to wipe/empty that briefcase of any information.

• Little success in getting competitors to dis one another in the exhibitor area despite my gentle lobbing of hanging curves.  Fortinet stated that they had next generation firewalls, (NGFWs);  before Palo Alto Networks and that Palo Alto Networks took over the phrase, (most people consider them the originator of the term).  Palo Alto Networks recognizes Websense not at the event) as a competitor, but feels that their technology still provides a better solution (it also sounds as Palo Alto Networks   had a nice internal celebration when they had their IPO.  Riverbed; no discussion of interest.  Blue Coat; a tad sensitive.  Their response when I asked what technology was under the hood of their DLP appliance (it appears not be a DLP/Malware appliance as in the previous version); their initial response was a non-confrontational, “why are you asking that?”  They then mentioned that it was from Code Green.

For those who are interested – Tchotchkes!

In addition to the usual data sheets;  tee shirt (leftover  from Black Hat), commuter mugs, BPA free water bottles, mugs with handles pens, pens, pens, transformer like pen!, mobile phone holder, a  ring style Frisbee flying saucer clone, candy, and a sumo wrestler stress toy (very cool).  

 

Casino break! 

Interesting listening to non-professionals explain the game and rules to those who had little experience with the games.

 An advanced screen of the movie “code 2600” is scheduled for day two of the conference. 

About secureworld expo 2012 – Decrypting the Mayan Code

 This is a multi city event.  Events are scheduled for Detroit, Dallas, and Seattle.

 http://www.secureworldpost.secureworldexpo.com/  

Secure Web Gateway Market Heating Up – Websense Version 7.7

The Secure Web Gateway market is livening up.  On Monday, San Diego based Websense announced Version 7.7 of Websense Triton and their Websense   Secure Web Gateway.  They state that their Websense Triton solution is the first to provide data-aware defenses necessary to prevent the advanced attacks that lead to data theft.

Websense also announced that the 7.7 release contains 10 new advanced malware and data theft advances, including spear phishing protection with cloud sandboxing, and a new forensic reporting dashboard with in-depth security intelligence.

These new defenses also  include    detecting criminal encrypted uploads; advanced malware payloads and command-and-control recognition; optical character recognition (OCR) of text within images for data-in-motion; drip (stateful) DLP detection; password file theft detection; and geolocation awareness.  These are powered by   Websense’s real-time inline ACE (Advanced Classification Engine) security engine and Websense’s imbedded Data Loss Prevention (DLP) engine.

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Spear phishing protection with cloud sandboxing is part of the arsenal.  Websense's   cloud sandboxing capability identifies suspicious links in emails for real time analysis.  When email recipients click on an embedded URL, Websense analyzes the website content and browser code in real time, in a cloud environment, to ensure safety in any location at any time.

The Websense TRITON Advanced Malware Threat dashboard   profiles security incidents, provides in-depth forensics, and data theft capture.  With severity levels and the ability to export incidents to SIEM solutions, Websense users know who was attacked, how the attacks function, where those communications were being sent, and what data was targeted.

Blue Coat Systems is promoting that their   Unified Web Security Solution, combining cloud services and on-premise appliances delivers the “No Boundaries, Always On protection”.  The cornerstone of their protection, their Secure Web Gateway appliance(s) (ProxySG) and their real-time WebPulse technology, a defense that utilizes   the information provided by 75 million users. 

Historically, Blue Coat has been an appliance-focused company.  They are now more heavily promoting their hybrid and cloud technology, due in large part to San Jose, CA based Zscaler.  Blue Coat  introduced their Unified Web Security Solution in March and are now more heavily promoting their cloud service, along with a 30-day trial.

According to the Gartner “Market Share: Security Software, Worldwide, 2011 Report (March 29, 2012), Inc., Blue Coat is the leader with 17 percent of the $1.95 billion Secure Web Gateway market.  This combines both appliances and software solutions.  In the appliance segment of the market, Blue Coat has about  44 percent of the market, leading its closest competitor by more than 30 percentage points.

Zscaler is the cloud-based canon in the mix.  Actually, they use a jet in their imagery.  Zscaler offers a pure cloud based solution.   They dislike hardware and consider Capex (Capital expenditure) to be a four letter word. They’re   the newcomer to the Leader’s portion of the Gartner Magic Quadrant for Secure Web Gateways.  Gartner considers them the Leader with respect to Completeness of Vision.  Cisco is given credit for having the best Ability to Execute, with Blue Coat and Websense sandwiched between the two.  Mc.Afee is  off to the left in the Leader portion of the Magic Quadrant.

The Zscaler  message – “Attention  all Blue Coat Customers, if you’re  the victim of underperforming proxies lacking sufficient security or if you have lost budget support  due to the high cost of multiple appliances, call the Zscaler Security Help Line.”  They offer five flavors of cloud based web security suites http://www.zscaler.com/products_web_security.html  Add on’s include email protection, mobile protection, and Data Loss Prevention (DLP).

One of their promotions has been to offer their solution free for six months to prospects.  The focus being on Blue Coat customers.

So where will this play out?  Blue Coat is 20% leaner and meaner, following their purchase by equity investment firm Thoma Bravo.  They have a hybrid solution.  They have a cloud solution.  They haven’t done a great job of promoting these.  They have a leading WAN solution but that merits a separate discussion. 

It should be an interesting summer for these companies.

Websense has upgraded their product line.  Their solutions have been available as appliances, SaaS, software,  and a Hybrid.  Like Zscaler, they offer email security, as well.  This is a hole in the Blue Coat product line.

Zscaler has their sight on Blue Coat, almost exclusively. They want share. They have a reputation for playing a bit loose regarding number of data centers around the world. But,  hey! It's marketing.   Blue Coat and Websense go after each other.  McAfee and Cisco, the other two companies in the Leaders portion of the quadrant, are relatively quiet in comparison.  Not quite in the shadows – Barracuda Networks, whose strategy tends to be to deliver the low cost solution. Also, Palo Alto Networks. Palo Alto Networks’  Next Generation Firewall provides filtering and like Websense,   automated sandbox analysis of suspicious files.  They also provide limited DLP protection, as well. They are now starting to move forward on the plans to go public.

   

Application control is a topic for another blog. 

Gartner Magic Quadrant for Secure Web Gateways - May 2012

Gartner released its Magic Quadrant for Secure Web Gateways on May 24    ID:G00234572.  You can’t say that there was a clear winner among the companies in the Leaders Quadrant.  Zscaler remained the highest ranked with respect to Completeness of Vision, and Cisco from the perspective of Ability to Execute.  Websense and Blue Coat were sandwiched in between with McAfee also in the Leaders Quadrant.  

Among the usual suspects, Webroot was dropped from the grid (must meet those revenue thresholds, people) and M86 Security is now part of Trustwave.  Barracuda is now in a more favorable position than Trend  Micro in the Challengers part of the quadrant.  Overall, though, there  wasn’t a lot of movement between the companies represented on the Quadrant.  

Companies evaluating alternatives  should look at the report for the Strengths and Cautions highlighted by Gartner.  It’s also interesting  to look at the previous year’s report,   to see whether vendors you’re evaluating dealt with any of the Cautions Gartner brought up for vendors you may have  under evaluation. 

According to Gartner, The market is  led by  on-premises solutions with 87% of the market with SWG as a service representing the remainder.  Gartner  see’s  the SaaS alternative growing at 35% in fiscal 2012.

Next Generation Firewalls (NGFW) from companies such as  SonicWall and Palo Alto Networks were not included in the reports,  as these are primarily firewalls.  People interested in the growing evolution of this technology and SWG’s, should acquire the Gartner Report  "Next-Generation Firewalls and Secure Web Gateways Will Not Converge Before 2015,"  ID Number: G00212272.  Palo Alto Networks   positions  their NGFW solutions  as making the need to acquire a secure web gateway unnecessary. Unrelated side note - There have to be discussions by Palo Alto Networks people and the "smartest guys in the room" about their pending IPO (Initial Public Offering) after the recent Facebook IPO. Predictions - there will be a Harvard Business School case study and the phrases "pop" and "money on the table" will appear in a lot more articles on future IPOs.

How Do You Use A Gartner Magic Quadrant?

The below is from a Research Methodologies piece  on utilizing Magic Quadrants.  Too often,  a pic of the quadrant will make its way onto a slide deck with no explanation. 

 

Clients use Magic Quadrants as a first step to understanding the technology providers they might consider for a specific investment opportunity.Keep in mind that focusing on the leaders' quadrant isn't always the best course of action.  There are good reasons to consider market challengers.  And a niche player may support your needs better than a market leader.  It all depends on how the provider aligns with your business goals.

http://www.gartner.com/technology/research/methodologies/research_mq.jsp

 

Those wanting a full copy of the report can go to Gartner or register with vendors such as Zscaler for read access to the report. Let the issuing of press releases begin. 

 http://www.zscaler.com/Gartner-Magic-Quadrant-Secure-Web-Gateway.html?src=WEB_HOME

 

Riverbed Technology Stock Rolling Down the River

Riverbed Technology (RVBD) stock took a major hit on Friday, dropping 29%  to $19.85 following their earnings announcement on Thursday.      This was close to their  52-week low of $19.48 in October.  Riverbed Technology’s 52-week peak was   around $41 in July 2011. 

This tumble was the most for Riverbed most since its market debut five years ago. As part of the earnings announcement, Riverbed   lowered their forecast for 2012 sales growth, citing the effect of new product introductions.

“The combination of our product transition and a seasonally weaker quarter was challenging,” President and CEO Jerry Kennelly, said on a conference call.   “We continue to feel the unavoidable growing pains associated with becoming a multiproduct company.”

Riverbed announced their Q1 results on Thursday.  “In a seasonally difficult quarter, we completed a major product cycle and achieved results within our guidance range,” stated Kennelly.  Their Q1 revenue of $182 million was 12% greater year over year.  Their net income dropped from $13 million to $7 million, not an auspicious way to start the fiscal year. 

Riverbed is in the Leaders section of  the January 2011  Gartner Magic Quadrant for WAN Optimization Controllers. They rank  higher that the other two companies in the Leaders section, for both Ability to Execute and Completeness of Vision.   Blue Coat Systems and Silver Peak Systems are the other two companies in this portion of the quadrant.

Nonetheless, analysts were not kind to Riverbed on Friday following the earnings announcement.  The stock received seven downgrades,  from Mizuho, JP Morgan, Wedbush Securities, Capstone, Cantor, Oppenheimer, and RBC Capital.

Riverbed may be dealing with some further  financial rapids in Q2. 

http://www.bloomberg.com/news/2012-04-20/riverbed-technology-tumbles-as-sales-trail-estimates.html

 

http://ir.riverbed.com/phoenix.zhtml?c=198235&p=irol-newsArticle&ID=1685213&highlight

Trustwave to Acquire M86 Security

Trustwave, a Chicago cloud based, provider of on-demand data security and payment card industry compliance management solutions, has come to an agreement to acquire M86 Security. M86 Security, based in Irvine, CA, is a combination of what were four separate companies several years ago. They may still be better known for some of their parts, Marshal, Avinti, 8e6, and Finjan than they are for the M86 Security name.

M86 Security is one of two Visionaries in the 2011 Gartner Magic Quadrant for Secure Web Gateways, competing against leaders Cisco, Blue Coat Systems (taken private by Thoma Bravo in February), Websense, McAfee, and Zscaler. They offer solutions in Web Security, email security, and have an SMB Security Suite. M86 does not offer the real time defense solution and web application controls that some of their competitors provide. However, they were the first company to deliver a hybrid cloud Web security service. M86 Security’s email security solution is one of the Visionaries in Gartner’s Magic Quadrant for Secure Email Gateways.

This is a nice acquisition for Trustwave. They gain 26,000 customers. It broadens their already extensive security portfolio. It gives them great brand recognition and entrees in the Secure Web Gateway and Secure email Gateway marketplace. The nice thing about the M86 Secure Web Gateway solution is that it can be deployed as a traditional appliance, virtual appliance, or a hybrid cloud option. Of course, companies like Zscaler, would beg to differ, stating that a cloud solution is the only way to go. Nonetheless, hybrid solutions are nice for companies considering the cloud without having to drink the cloud kool-aid (bit of a mixed metaphor).

M86 Security – Irvine, CA. Trustwave - Chicago. I see the Irvine office remaining.

To learn more about the respective companies - http://www.trustwave.com and http://m86security.com