 Live from New York, it's theCUBE, covering Riverbed Disrupt, brought to you by Riverbed. Here are your hosts, Dave Vellante and Stu Miniman. Welcome back to New York City. Everybody, we're here at Riverbed Disrupt. This is theCUBE, the worldwide leader in live tech coverage. Paul O'Farrill is here as the Senior Vice President and General Manager at Riverbed. Paul, welcome to theCUBE. Thank you. Coming on. Networking needs a fundamental rethink. Why? Well, if you think about it, there's been so much change in the IT industry and technology over the last, you know, five, 10 years, however far you want to go back. And somewhere along the line, networking just got stuck in the time warp. And if you think about sort of every aspect of your daily life, whether it's, you know, the kind of hackneyed examples from the consumer world like ordering an Uber or using something to order food or whatever it is you do every day, all of that has changed. But for network administrators, life looks pretty much the way it was back in the, you know, 10 years ago, maybe even 20 years ago when the first writers sort of really went mainstream. And it's really taking a lot of that technology and bringing it into the cloud era that we think is what the industry needs right now. So you're responsible for the Steelhead, the SteelConnect, and the SteelFusion portfolios. That's right. Which is the vast majority of the company's portfolios. Yeah. And we're just through them because many people in our audience aren't familiar with the product set. Everybody knows Riverbed and you're familiar with the company but talk about the products a little bit. Yeah, so Steelhead, which was our original product is kind of the flagship product of the company. And Steelhead was, we sold the first Steelhead back in 2004. And that product was really designed around helping enterprises to consolidate their IT infrastructure out of remote locations and consolidate it into the data center through a variety of different optimization techniques. And that product really caught on and it's deployed in, I don't know the latest stats, probably about 97% of the global 2000 companies. They've been very successful company, a very successful product. And what we've done is we've evolved that set of technologies over time. We created a new product in 2012 called SteelFusion. SteelFusion is a product that's designed to allow you to all of the things you could do with the Steelhead but also allow you to run applications locally in the branch. So while having your data physically resident in a data center in the cloud. So there's a certain family of applications that for a variety of reasons still need to run in the remote location in the branch. And it's enabling that in a highly secure fashion that also has some benefits around efficient ways you can run a branch office. So if an application goes down you can recover it very fast. If you wanna provision new applications you can do that essentially instantly as well. So this is SteelFusion product family. And then finally the latest addition to the product family is the SteelConnect product which has started off as this concept of a software defined wide area networking offering. And then it's really evolved particularly with the acquisition we did with an acquisition of a small but highly innovative company based in Germany at the beginning of the year called Oceto. And they not only accelerated our entry into this new market of software defined WAN they also gave us a much broader and more expansive vision around what we could do with networking which includes an entirely new way of thinking about how do you manage networks with a single management console for managing LAN, WAN and cloud. So Oceto allowed you to eliminate that manager of managers that you talked about. Yeah that was part of it. I mean I think we were already quite far down the path of building our own software defined WAN solution. And what Oceto did was not only did they accelerate us in that effort but they gave us a very powerful management console. They gave us a cloud based management console that you could use to manage every aspect of your network and do that centrally with either one or a very small number of trained professionals. You really be able to design, deploy and operate your network without ever touching a box. And you can imagine drop shipping a box be it a gateway, a switch, a wifi access point into a remote location, have it authenticate itself and just start passing traffic. So yes the management console is really key part of the story. So Paul one of the things that resonated with me that you said this morning is it's a cloud centric workflow is what we need. So can you talk about how not just you're putting things in the cloud but how kind of the cloud operations model goes across your whole portfolio? Absolutely. If you think about what's happened since Amazon Web Services was first launched 10 years ago. And obviously there's plenty of other players in the market people like Azure and IBM and all the large tech companies have some form of cloud offering. And you think about what you can do now as an IT professional. So an IT professional can be asked in the morning to spin up servers, storage, and an application in multiple countries and have it done by the afternoon. You can ask an IT professional to, you couldn't have done that 10 years ago that would have said you're completely crazy I can't possibly do that. But you can do that with platforms like AWS with Azure with Google. What you can do is spin up your network or manage your network or configure your network with that ease at least you couldn't do that before we launched the SteelConnect product. So a lot of what we're about is really taking that cloud-centric workflow, the type of workflow that people have gotten used to whether they're using consumer products or whether they're using some of these more modern cloud-based IT solutions and really mimic that and make it feel like the same type of intuitive way to configure things the same type of sort of simple centralized approach automated approach, policy-based approach managing the network. And when you talk about kind of the buyer of it because networking, I think when SDN first came out one of my critiques was it solves networking problems. It doesn't necessarily solve business problems. It's advanced beyond that, but talk about kind of the business buyer and the applications and how you focus on that. Sure, I mean I think the old joke about SDN was that it really was something in search of, technology in search of a ballroom. It did, I mean the SDN really got in many ways did provide some benefits to data center architectures. So people who really implemented the SDN approach in the data center were able to benefit from some streamlined operations of their environments. But that really got, there was no attempt really to apply that thinking until today really to the white area network or to the world where most of the network administrator's time is actually spent, trying to ensure that the right type of connectivity is available in the branch. And so a lot of what we're talking about is really trying to extend that thinking and paradigm to the white area network, to remote locations, to the overall interest network. You talked a lot this morning about the branch and how that's transforming and the different models that you pursue with the branch. So give us some color on that. Sure, so the important thing to remember is when Riverbed talks about branches, we don't mean something small. We really mean about the place where you run your business, where business gets done. So whether you call it a branch, a site, a location, and network, it doesn't really matter. It can be a factory, it can be an oil rig, it can be a retail store with half a million square feet of retail capacity. So what we've recognized is that obviously there's different flavors of branches, the different sets of requirement, there's different types of infrastructure footprint in those locations. And what we've tried to put together in the solution we announced today, solution set, which is the Cloud Ready Branch solution set, is an attempt to bring the richness of all of our technology across the different products and really combine that in a new packaging that addresses specific needs of different types of branch. So the quick examples would be you've got internet branches. These are branches that are the most evolved state of cloud adoption, where they've really moved to all cloud-size-based applications. They really don't have any need other than internet access or cloud access for networking. And then, of course, you need some visibility there, too. There's a second generation of branches, which are what we call hybrid branches, which have more dependence on traditional applications, client server applications that are still served out of the data center. And that's where we would add the ability to do some one-optimization. And the third category is where you still have the heaviest infrastructure footprint. And that's where we call that our desire is to turn that into something called a stateless branch, where you can run that in a way that doesn't constrain you in any way in terms of the types of applications or the type of workloads or the way you consume those applications, but can all be managed in a software-fine manner that is centrally administered and policy-based and automated. I want to ask you about this whole trend toward hyper-converged. Many of the hyper-converged players are very storage-heavy. They're essentially storage companies, and they do some partnerships with networking and server companies, and they say, OK, you can eliminate all this complexity and boom. How, what's your point of view on that whole hyper-converged infrastructure? You participate in some way, shape, or form there. You're kind of storage-light, if you will. Give us riverbeds point of view. Yeah, so hyper-converged infrastructure, again, it's kind of like SDN is very much trapped in the data center right now. If you look at most of the players, whether they be the big vendors like EMC or others, IBM, or Cisco, it really is a data center play. It's about combining in a new form factor in a slightly more integrated manner, storage, server, and network infrastructure. What we think is it's really about extending some of that value of hyper-converged infrastructure out to the edge, out to the branch where we really turn a lot of our focus, and being able to do that in a way that still allows you to manage that branch. We like the idea of a stateless branch, so you can manage a branch with a fully hyper-converged stack. So we have a solution around storage, a solution around server, or compute power, and then some networking as well. But deliver that in a way that doesn't require you to have any IT expertise on-site. So all of that can be centrally managed. All of your data is physically resonant in a data center or a cloud, but is made available to applications working on the edge. So it's kind of like a smartphone. So if you think about a smartphone, we think this is probably the best analogy. But if you think about a smartphone, if you've got it backed up correctly, you go on a business trip and you lose it. You can get out the other end of your business trip, be it in another city. And you can go into your local service provider, AT&T, Verizon, and you can basically be up and running. It'll be $700 poorer afterwards with all of your applications, all of your data, as long as you backed it up to the cloud. And that's the way we believe branches should operate, too. You shouldn't require the existence of any of the traditional sort of server storage, backup infrastructure, and you should be able to provision them and recover them as if they were a smartphone. So branch is a location, and it can be anything. It was a factory, an oil rig, it could be a windmill. So we talked a lot about digital transformation this morning. IoT never came up, at least not that I heard, but a lot about the edge, and the edge is critical for IoT. Is that just not a market that you're ready to pursue yet? Is that sort of a couple years out? Sure, I mean, I think that we've set ourselves sort of a near term mission of transforming the way enterprise networks are managed, and really bringing, as we said earlier, enterprise networks into the cloud era. That's a pretty big and bold goal for us. We're competing, we're competing, I'll chew on that for a while, that's a good way of thinking about it. So we're going to be competing with some of the biggest tech vendors in the world. People have been at this for 20 years. So it's going to keep us busy for a while. There is absolutely no reason why, we talk a lot about scalability because enterprises need scalability, particularly in data centers. But there's no reason why you can't take our technology and then apply it also in a different scale in the branch. And so go to the level of having thousands of access points to capture IoT information. And that's something we're definitely interested in doing. It just hasn't, it's just not on the immediate roadmap. But IoT is definitely one of the reasons why you need a centralized cloud-centric approach, an automated policy-based approach to managing your network infrastructure. If you're going to have, you know, literally, you're not talking about hundreds or thousands of branches now, you're potentially talking about the equivalent of tens of thousands of location sites, nodes on your network where you're going to have to be managing traffic, so. Paul, this morning Jerry said that the SteelConnect 2.0 will be the diamond in the crown of the Riverbed portfolio. So I know you had the engineers working, you know, no vacations to get from the 1.0 in April to the 2.0 that's launching soon. It talked to us a little bit about, you know, you gave a little bit of the roadmap going forward. What do you expect from the SteelConnect 2.0? You know, what does it become a billion-dollar product on its own? Well, I think it definitely has the potential to do that. I think we talked a little bit this morning about how much initial demand we've seen. We've been very encouraged by the fact that, even though we went out with a limited availability launch, not something Riverbed's done before, but we're going into a new market and we're kind of trying to make sure that we really understand the use cases and customer requirements. But based on that, we've seen huge interest and what really sort of was a pleasant surprise, a lot of that interest is coming from some of the biggest corporations and organizations in the world. So there's a lot of pent-up demand for a new approach to networking. 2016 was really about, you know, getting the product to a point where it is scalable, it is robust, it is fully featured. And we think that certainly by the end of this year, we'll be well along the path of doing that. And we have a very much competitive product that can go up against some of the new startup PurePlay SD-WAN vendors, but more importantly, up against the traditional networking incumbents. Next year is really about taking that to the next level. We talked a little bit about how we're beginning down the path of really tight integration with our visibility suite. There'll be a lot more of that going forward. Extending the platform to support third-party services. So we had Nier Zürich, the founder of Palo Alto Networks on stage this morning at the event. And that's a partnership we're very excited about. There'll be a lot of other partnerships like that where we have the concept of a service chain of different services from third parties, either on cloud or on box going forward. And then it's really about sort of further integration of the overall platform into sort of bite-sized pieces that our customers can consume in a simple manner. Paul, when you're a one-product company, you can have very high net promoter scores, your engineering resources very focused, your sales team is focused. When you shift to a multi-product platform company, what are some of the challenges that you face and how have you navigated those? Well, I think RiverBand is a company, so we're 14 years old now, we started in 2002. We've already gone through that cycle at some level. We are kind of RiverBand 2.0, so as you may know, we went private last year and as part of going private, we kind of rationalized our portfolio. So we had already shifted from being a single-product company some time ago. Our first real diversification into a new product area was back in 2007, 2008 when we did our first acquisition. What we found that was challenging as you become a multi-product company, as you make that shift from a single-product company, all the things you talked about. The real challenge, though, was if you start off with a blockbuster first product, then the expectation is everything else will be like that. And that still, it really was a blockbuster first product. It's a product that, as we mentioned earlier, was adopted by just about 85% of the global 2000, I think, is our latest stats. And so I think what happens is you end up in a situation where if you're not careful, you can defocus yourselves for us. You can spread your R&D investments too thin. But I think we've already experienced the challenges of that. We're coming out of that original attempt to diversification in a much tighter, with a much tighter organization and a much more focused strategy. And the products that we're bringing at now, whether it be the evolution of Steelhead so that it's better suited to the cloud environment, whether it's bringing the SteelFusion product to more customers and making it a more mainstream offering, or whether it's this new product SteelConnect, they're all linked around some basic concepts. And part of launching this cloud-ready branch initiative today was really to give us a simpler way of talking to our customers about our technologies and weaving them into one coherent story that makes it easy for people to understand them and to make the maximum use of them. And you've been a very acquisitive company and by all accounts, it's been quite successful. Although early on, you were under the spotlight of the public markets and you got a lot of scrutiny there. You feel like you're perfecting that M&A model and you guys look at yourselves as aspiring to be one of the top acquirers in the business. Yeah, so I personally have a long history of acquisitions. I did acquisitions at Cisco and the Hay Day. I was at Cisco when we were doing two acquisitions a month. I did acquisitions also at NetApp for some period of time. I think at Riverbed, I've seen probably the most focused and successful acquisition strategy of all of the companies I've worked at because we have a very sort of focused vision around where we want to be as a company and the markets we want to go after. And I think we're going to get better at that. It is a little bit easier as a private company to do these things because you're not on that constant quarterly treadmill where one missed step is it causes sort of a major change in your market cap and causes people to question the logic of some of your strategy. Being private makes it a little bit easier. It allows us to make some of these changes to our strategy to expand into new markets in a controlled manner, in a thoughtful manner without being constantly second gas by Wall Street Analyst. So I think it's a little bit easier. It doesn't really remove any of the, we still need to hit our number every quarter and we still need to be gain market share and win in the market's rim, but it definitely helps us from just that quarterly constant pressure. Well, but if you miss, it's not as much of a distraction. And if you blow it away, it's not as much of a distraction either. Exactly, you're absolutely right. It's really the distraction factor more than anything else. It's not that we necessarily changed our strategy that much even as a public company based on quarterly results, but it was very distracting if you have analysts constantly second guessing what you're doing. And it's just an easier way to operate, at least for the time being as we sort of evolve the company a little bit further. Okay, last question out of time, but so look out a couple of years, two, three years. What should we expect Riverbed to look like? Well, I think you're going to see a company that has a diversified product portfolio, but a product portfolio that's presented the market in a very integrated, it's part of a very integrated story. I think we'll keep our vision around how do you manage and how do you support highly distributed organizations? I think we do really believe that there's an opportunity, a huge opportunity for Riverbed and for its customers to really rethink enterprise networking. We think that if we're successful, there'll be a much more powerful way to manage networks that is much more in tune with the way people have grown to manage or learned how to manage other parts of the IT infrastructure stack. And that's really what our SteelConnect strategy is all about. And all of that will be supported by a single visibility, sort of end-to-end, click-to-disk type of visibility capabilities very embedded. I think that's going to be a big force in the technology industry. And I think it's going to be an exciting place to be for us and for, we hope, our customers and partners as well. All right, we'll leave it there. Paul, thanks very much for coming on theCUBE. Yeah, it's been a pleasure. Okay, keep it right there. Everybody will be back with our next guest. We're live from New York City. This is Riverbed Disrupt. This is theCUBE, right back.