Silver Peak CEO: We're re-imagining the WAN for a cloud world

CEO and founder David Hughes sees huge opportunities in software-defined WAN.

1 2 Page 2
Page 2 of 2

As we move beyond WAN optimization, we face a different set of competitors. Some of those competitors that are in the WAN optimization space like Riverbed don’t appear to be making a transition into this new world of SD-WAN and virtual WAN overlays. From a competitive point of view, there’s always Cisco. Cisco has pretty much a stranglehold on branch infrastructure in enterprises and, of course, they also hear what customers are asking for in terms of the problems they’re facing. But they have continued to sell branch routers and to continue things along the [current] lines. When you look at the landscape, it’s us and some brand new companies that I think provide the innovation in this space and really provide the true overlay technology to build a virtual WAN.

How many months or years lead do you think you have on this versus competitors?

I think that’s the hard way to measure things. How are we uniquely positioned? For 10 years we’ve been building overlay networks. A little known secret is that we’ve always been an overlay. Right from version 1.0 of our WAN optimization software we used tunnels to build an overlay between all of our devices, where almost all the other vendors were [using] PCP proxies. They were proxies at heart. We used to get beaten up because we were using these tunnels and building an overlay. What’s really interesting is that as the requirements have changed, as people have come to understand that the currency of SD-anything is building this virtualization layer, our heritage is really becoming a strength. That puts us in a unique position. Having 2,000 customers where we’ve deployed our software and hardware appliances running some of the biggest wide-area networks in the world, means we’re bringing to bear mature software and experience with WANs that puts us at an advantage with respect to someone coming out with version 1.0 of their solution. Even if they’ve got some great ideas, it’s going to take some time to mature.

What percentage of your products are delivered as hardware versus software?

More than half of our business is pure software, people buying virtual appliances either by subscription or on a perpetual basis. Less than half now is the same software delivered on hardware that we supply. We’ve seen that transition happen pretty swiftly. I think it’s probably about four or five years ago, we shipped everything as hardware and in those years the business has moved really dramatically. It’s pretty exciting to see that and certainly as we moved into that software world we learned a lot about the way the world has changed and where the world is going. It’s much more about agility and automation than about some of the things that traditional networking people worry about.

Do you envision a point in the future where it’s 100% software based?

Possibly, but I think there are always customers that are looking for a complete turnkey, off-the-shelf solution and so we don’t want to force the customers down a path they don’t want to go. Better to let the customers choose. There is definitely a minority going with hardware but I’m not sure it ever gets to 100% software.

What about the mix between this new software-defined WAN focus versus traditional optimization capabilities? Where does that stand today?

I don’t so much think of them as opposed to each other.

I didn’t mean to imply that you were but just in terms of what’s driving the business.

I think that for WAN optimization it’s about performance and the performance over distance, as I said before. For SD-WAN it’s about connectivity. Those are two different problems. The WAN optimization market is mature and people have a sense of the size of it, more than $1 billion. SD-WAN is an emerging opportunity. It disrupts the branch infrastructure market and the MPLS services market. Both of those markets are worth multiple billions of dollars so we expect SD-WAN or virtual WANs to be a multiple billion dollar market. Over the long run we expect that business will be bigger than WAN optimization.

Would you ever offer SD-WAN as a service?

Ever is a strong word, but at Silver Peak we’re really focused on being a software company, a leading software company. It’s not in our plans to become a service provider. We are working with service providers, letting them use our technology to provide services.

You took over as CEO in 2013. How did you change the path of the company?

I stepped up as CEO because I was very excited about the future. I saw that with the SDN movement coupled with what was happening with cloud, coupled with what we had seen in terms of the adoption of software, there was a big opportunity for us to move beyond WAN optimization. The key objectives I shared with the company were twofold: We wanted to continue to execute in WAN optimization to be able to deliver to our customers scalable acceleration; but at the same time invest into what we saw coming beyond WAN optimization, which is culminating in what we’re doing with Unity and Edge Connect.

Where do you go from here? What will we see in 2015 and beyond?

With the launch in June of our EdgeConnect portfolio, we move from a one-product-family company to having two product families, one for WAN optimization opportunities and problems and the other for this emerging branch connectivity SD-WAN opportunity. You’ll see us continue to build and innovate in both areas but particularly on the SD-WAN side. This is a very new industry, a new opportunity and so there’s a lot of room for innovation. While we’re extremely proud of what we have right now and we think we’re leading the industry, there’s a lot more that can be done to drive automation, to drive flexibility, to make these networks easier to scale, more rapid to deploy and that’s the path forward.

Talk about the EdgeConnect announcement.

Unity, as I said, is the overlay. The announcement was about EdgeConnect, which is a very specific product family. It’s all about being able to take a box or a piece of software, plug it in a branch and be up and running as a full branch within minutes instead of months. It’s about being able to use whatever service is available in that location, whether it’s plugging in a 4G LTE stick to get going while you’re waiting for MPLS to arrive or plugging into a consumer broadband cable circuit. You can be up and running straightaway. Part of it is about that zero-touch provisioning, really easy to get up and running.

The other aspect is about being able to provision with business intent policies. For most of the history of networking, network management and automation has been looking at devices at an element level and how do I configure all of these elements. But the customers’ problems aren’t really about elements. They’re really about services at a network level. A WAN fundamentally is about connecting users to apps. If you can let a customer describe their problem in that way, then you can actually reduce building a network to filling out just a single set of forms on one screen. So, I want to build a voiceover layer, I want it to have mesh connectivity, I want it to meet these quality of service goals, etc. Once you’ve said that, now every time you add a branch we automatically provision it. There’s no need to go back and do any extra work as you add incremental branches. That ability to specify things with a business intent policy at a level way above the individual elements, I think, is something which will provide savings not just from a bandwidth point of view. When you say savings, sometimes people jump to the bandwidth savings or Internet versus MPLS. There are really three kinds of savings: there’s bandwidth; there’s OpEx, because you can make this network much easier to run; and then - looking a bit farther forward - there’s CapEx savings, because as you implement a virtual WAN like EdgeConnect, you ultimately can implement a thin branch architecture. You don’t need routers and firewalls in all of these branches. You end up with a much lower CapEx cost for building your wide-area network.

How do you handle security in this new WAN?

We’re partnering with a number of security vendors because there are many aspects to security which go beyond what we’re talking about. The fundamental thing that we do with EdgeConnect is enable you to deploy directly onto the wide-area network without a router or a firewall in front of you. If you think about the traditional WAN optimization deployment, it was always behind a firewall or router and you’re trying to be transparent and fit into the existing network architecture. With EdgeConnect and with a virtual WAN you can plug straight into the Internet and in order to do that we need to be hardened against attacks coming in and we need to encrypt everything. The overlay is encrypted with 256-bit encryption edge-to-edge and that provides the secure fabric regardless of whether you’re running over the Internet or MPLS. You’ve got an infrastructure that is very secure.

What about management tools?

In terms of components in the solution, there’s the EdgeConnect devices which go in the branch and there’s the Unity Orchestrator. The orchestrator or controller is a thing that manages the network. It’s the place where you apply policies and where you get a little reporting - reporting on applications, reporting on the destination, not just saying it’s HTTP traffic but is it traffic for Facebook or is it to Salesforce or is it to someplace in the middle of China where we don’t think we’ve got any business going? That kind of visibility you get with our orchestration. As far as integrating with third-party devices, as well as networking-based things like SNMP, which is standard, we have a full set of REST APIs that are there for automation, both for controlling our devices and applying policy as well as for extracting information like all of the statistics that we collect.

David, what else should we know?

We’re very excited at Silver Peak about the change that’s happening in the industry and being able to partner with customers as they look to move beyond MPLS and build these new virtual WANs. We think that there’s a lot of value that can be provided with flexible solutions, being able to use whatever network you want, to do it securely, getting control and visibility, being able to get performance. You don’t sacrifice performance using the Internet. Of course, there are the three aspects of savings that we talked about. We’re very excited about what’s happening.

So you want people to know Silver Peak not as a WAN optimization company but as an SD-WAN company?

Yes, or even more broadly as a WAN company. Helping people with their WAN challenges is where I see us going forward. It’s about how we build the best possible WAN with our customers.

This story, "Silver Peak CEO: We're re-imagining the WAN for a cloud world" was originally published by Network World.


Copyright © 2015 IDG Communications, Inc.

1 2 Page 2
Page 2 of 2