WAN-optimization vendor Silver Peak lands $21 million

Three funding rounds in three years, the total is now $63 million

Silver Peak Systems has raised another $21 million in venture capital, the fourth round of funding for the WAN acceleration and optimization company, bringing total borrowing for the company to $63 million.

The borrowing comes at the same time of year as its previous two dips into venture money, $17 million last January and $13 million the January before.

The company faces stiff competition from a dozen or so competitors, the top four of which are Riverbed, Cisco, Blue Coat and Packeteer, according to Matthias Machowinski, an analyst for Infonetics Research. (For more on WAN optimization vendors please visit our Application Acceleration and WAN Traffic Optimization Buyer's Guide.)

To continue reading, register here and become an Insider. You'll get free access to premium content from CIO, Computerworld, CSO, InfoWorld, and Network World. See more Insider content or sign in.

Silver Peak Systems has raised another $21 million in venture capital, the fourth round of funding for the WAN acceleration and optimization company, bringing total borrowing for the company to $63 million.

The borrowing comes at the same time of year as its previous two dips into venture money, $17 million last January and $13 million the January before.

The company faces stiff competition from a dozen or so competitors, the top four of which are Riverbed, Cisco, Blue Coat and Packeteer, according to Matthias Machowinski, an analyst for Infonetics Research. (For more on WAN optimization vendors please visit our Application Acceleration and WAN Traffic Optimization Buyer's Guide.)

It's impossible to tell what share of the market Silver Peak holds down, he says, because the privately held company doesn't share its sales data with analysts. But he estimates that the company's percentage of the market to be in the single-digits.

The total market grew to $700 million in 2007, up 65% over 2006, he says, but growth is expected to cool to about 30% this year and to 20% in 2009. The growth for 2007 is estimated because final numbers are not in yet for the fourth quarter, he says.

This type of equipment is deployed as pairs of appliances that sit at opposite ends of WAN links and perform a variety of functions on traffic in an effort to speed it up. These methods include reducing the number of bits that have to cross the WAN, to optimizing TCP to application-specific manipulations.

Silver Peak specializes in WAN optimization for the largest links, restricting the number of customers it might serve, Machowinski says. At the same time, as the growth of the market slows, he believes it will support fewer vendors, so competition will be stiff.

Already some competitors have been bought up, including Peribit, bought by Juniper, and Orbital Data, bought by Citrix.

The most recent Gartner study of WAN acceleration classifies Silver Peak as a niche player that has "shown particularly good understanding of the acceleration needs of data replication and backup."

Machowinski says Silver Peak faces challenges that all start-ups do, getting initial customers and shipments, and that takes time. "I have a pretty good idea what it means when they don't offer me their numbers," he says.

In December the company announced three new ways its gear can speed throughput of traffic that runs through its appliances.

Read more about lans & wans in Network World's LANs & WANs section.