WAN vendors fight for revenue

How are WAN optimization and application acceleration vendors faring in today's economic environment? Three players announced quarterly results in recent weeks, indicating varying degrees of success battling competitive pressures and IT spending cutbacks. (Compare Application Acceleration and WAN Traffic Optimization products)

Blue Coat Systems has been focusing on its integration of Packeteer, which is a costly effort with revenue upside. Meanwhile, demand for the high-end modular Viprion switch is fueling solid growth at F5 Networks. At Radware, executives are doing what they can to return the company to profitability later this year.

Here are the details.

* Blue Coat absorbs Packeteer
Blue Coat last week reported financial results for its first quarter of fiscal 2009, ended July 31. Blue Coat’s acquisition of Packeteer, completed June 6, gave its revenue a bump but took a toll on the bottom line.

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How are WAN optimization and application acceleration vendors faring in today's economic environment? Three players announced quarterly results in recent weeks, indicating varying degrees of success battling competitive pressures and IT spending cutbacks. (Compare Application Acceleration and WAN Traffic Optimization products)

Blue Coat Systems has been focusing on its integration of Packeteer, which is a costly effort with revenue upside. Meanwhile, demand for the high-end modular Viprion switch is fueling solid growth at F5 Networks. At Radware, executives are doing what they can to return the company to profitability later this year.

Here are the details.

* Blue Coat absorbs Packeteer
Blue Coat last week reported financial results for its first quarter of fiscal 2009, ended July 31. Blue Coat’s acquisition of Packeteer, completed June 6, gave its revenue a bump but took a toll on the bottom line.

Net revenue was $102.5 million, a 16% increase over the previous quarter and a 64% increase over the first quarter of fiscal 2008. Of that, $16.1 million is net revenue associated with the acquisition of Packeteer.

On the profit side, the company reported a net loss of $5.8 million for the quarter, compared to net income of $12.5 million in the fourth quarter of fiscal 2008. The loss includes $4.8 million of expense for integration activities related to the acquisition of Packeteer. Looking ahead, the acquisition is expected to continue to impact expenses: For the current quarter, Blue Coat expects to spend an additional $5.5 to $6.5 million for integration activities related to the acquisition.

"Now that we have completed the acquisition of Packeteer we are focusing on integrating the two companies into a single organization and reaping the cost, management, technology, and market synergies," said Brian NeSmith, president and CEO of Blue Coat, in a statement.

* F5’s Viprion fuels revenue climb
Late last month F5 announced results for its fiscal third quarter (ended June 30), and for the 22nd consecutive quarter announced sequential revenue growth. F5 hit revenue of $165.6 million, up 4% from the prior quarter and 25% from the third quarter of fiscal 2007. Profit dropped, however: Net income was $19.1 million, compared to $17.7 million in the prior quarter and $21.8 million in the year-ago quarter.

A key driver of revenue growth was the company’s Chassis-based Viprion controller, according to CEO John McAdam. “Sales of Viprion were especially robust among large Internet content and service providers, and we continue to see strong demand heading into the close of fiscal 2008,” McAdam said in a statement. McAdam also cited F5’s new entry-level ADC products, which have more powerful processors, bigger hard drives and more memory than F5’s previous low-end boxes. “BIG-IP 1600 and BIG-IP 3600 represent the first phase of a complete platform refresh that will roll out during fiscal 2009, delivering higher performance and more functionality across our ADC product line,” McAdam said.