The integration of two companies with fundamentally different partner bases poses specific challenges, but also creates new opportunities.
SANTA BARBARA – Last week, Riverbed announced the acquisition of enterprise wi-fi vendor Xirrus to strengthen its SteelConnect SD-WAN platform. This week, at their Riverbed Partner event here, the company provided its key channel partners with much more detail about why they did the deal, their integration plans, and why they think this is a big deal for both the Riverbed and Xirrus channels.
“The addition of Xirrus is exciting because it extends wi-fi all the way out to the edge,” Paul O’Farrell, SVP & GM, SteelHead and SteelFusion, told partners in his keynote address. “It’s not just a Meraki-killer. It could be much more broadly disruptive in the wi-fi market. HPE Aruba is also in its target zone.”
Xirrus set out to build the fastest and most infinitely scalable wi-fi networks in the world, and manage them with a cloud-based approach. Their customers span a broad range from Specialty’s Café and Bakery to large enterprises like global law firm Paul Hastings, large hotels like Disney’s Swan and Dolphin Hotel, and major convention venues like the Moscone Center in San Francisco and the Sands in Las Vegas. Both Xirrus and Riverbed were, however, facing challenges from the growing trends towards convergence between SD-WAN and wi-fi.
Riverbed was a latecomer to SD-WAN, basically buying their way into the business with the acquisition of German firm Ocedo in early 2016, and using their market reach to grow the business much more significantly than Ocedo could have done on their own.
“It’s not always the first mover who wins,” O’Farrell said. “Gartner says there are now at least 40 vendors in SD-WAN. We are tapping into a massive install base. You will see a massive shakeup in this space in the next couple of months.”
While the industry has already seen significant convergence between mainstream networking, SD-WAN and distributed networks, Riverbed sees wi-fi as the next area for this convergence.
“We did the deal because we were seeing increased overlap in these markets,” O’Farrell said. “We actually did sell some significant wi-fi deals through Ocedo. But more and more we are being asked to provide a better story around wi-fi, especially in retail. In order to do that, we have to have more bandwidth.”
“This may be the time when the pure play SD-WAN player starts to go away,” said Josh Dobies, Riverbed’s VP of Product Marketing in the United States. “Already with WAN optimization and SD-WAN, these two services must work together. You can’t simply take best of breed in both, and combine them and expect that the application-centricity will flow through. Gartner has already invented a new segment – WAN edge infrastructure – for this space, but the pace of change means that it really isn’t complete. This segment might well include the wireless edge, firewalls and security services as part of their definition.”
Xirrus was also facing pressures from convergence.
“It was increasingly challenging for us as a standalone wi-fi company compared with Cisco Meraki and some of these other solutions,” said Bruce Miller, VP of product marketing at Xirrus. “The integration with SteelConnect into a broader solution will help us provide a better solution to the market, because the trend is clearly to unify all of this, and put it under one cloud management umbrella.”
O’Farrell drew a conscious parallel between their acquisition of Aternity last July and Xirrus. With Aternity, while the integration of the technology into Riverbed’s SteelCentral began immediately, the Aternity sales force remained separate until this January when it was integrated into Riverbed, and Riverbed people began selling it.
“We will continue to offer the full Xirrus product line,” he said. “The way they have built the product really impressed us.” He said that Xirrus’ RESTful APIs can be talked to very easily, and will facilitate a tight integration, noting that when they were doing a demo, they were able to fully integrate Xirrus into SteelConnect in a matter of hours.
“The initial plan is to maintain a full overlay separate team,” O’Farrell added. “The idea is we don’t want to break this thing. Over time though, you will see integration over the next six months where the fairly discrete Xirrus sales team will come together with the Riverbed sales force.”
Xirrus has developed a fuller vertical go-to-market strategy than Riverbed has to date, which is something they will be looking to leverage.
“We have verticalized a lot of go-to-market strategies, many of which overlap with Riverbed, but others of which are in addition to what they have done,” Miller said. “Microsoft Office 365 partners see us as an add-on to their business, and we have over 200 MSPs in our program.”
Miller said that Xirrus’ future roadmap plans may adjust because of the acquisition, but it has had three main themes.
“First, there is that emphasis on maturing services for MSPs, for them to easily bring up new sites and to make it as simple as possible for them to configure in minutes,” he said. He noted that the speedy integration with SteelConnect that O’Farrell had earlier reference stemmed from this.
“Second is cloud, and we have been tapping into Azure, Google Apps and even Facebook systems online, leveraging systems already there to make deployments even more cloud-centric. And third is analytics. We are adding more and more of this to our product.”
On the channel side, a key challenge is that wi-fi people tend to be LAN-focused, while WAN-optimization people – naturally enough – tend to be WAN-focused. The challenge is how to combine them effectively.
Karl Meulema, senior vice president, global channels at Riverbed, said that to get to long-term channel program integration, they need to first get an understanding of what the two programs offer.
“We need to get to a consistent model, although we may do something very different for something like K-12, because of the specificity of that market,” he stated.
“Both companies already have solid programs,” said Lynne D. Tinney, VP Channels, Americas at Riverbed. “We have to do the background work to get them together, but it helps that we both have a good thing going already, No one is starting from scratch. We just have a lot of handshakes to do and meetings to set, to make it seem seamless as we go from putty to stone.”
Today, because of the different legacy bases of the wi-fi and WAN-optimization channel, very few partners are involved with both companies, which will create more possibilities for synergy as that changes.
“We see only a very small channel overlap today,” said Malissa King, Senior Director of Global Channels and Inside Sales at Xirrus. “We do see a great opportunity both for our partners and for Riverbed partners.” She noted that she hadn’t seen a lot of anxiety from the Xirrus partners about the acquisition, and that there was recognition that broadening beyond wi-fi would be a plus.
There might be significant changes involving the two companies’ distribution – but Meulema pointed out that Riverbed is in the process of overhauling its distribution anyway.
“There is a lot more overlap with the distributors than there is on the partner side,” he said “We are already rationalizing our overall landscape of distribution, and this will be just another factor.”