WAN optimization vendor Silver Peak Systems changed CEOs last month when founder David Hughes moved from chief technology officer to replace Rick Tinsley, who ran the company since 2004.
The change comes with Silver Peak focused on transitioning from hardware WAN acceleration to its VRX virtual appliance software, and as it makes a play to make its technology more accessible to storage managers to improve WAN replication. We spoke with Hughes about reasons for the CEO change and Silver Peak's greater emphasis on storage.
What was the reason for the CEO change?
David Hughes: I started Silver Peak in 2004. I was founder and original CEO. In the first few months, I met Rick and recruited him as CEO so I could spend more time focused on technical challenges. He has led the company through eight years, a time during which most of our competitors have fallen away. Now we're in a unique position where we've converted the WAN optimization market from a hardware-dominated market to a software-centric market.
We are helping customers on a path to virtualization, and it's opening up a lot of opportunities for innovation. The next 12 to 24 months can be very different than the last eight years, so I'm stepping up to CEO and taking the reins.
Was this your decision or did Rick decide to leave?
Hughes: Whenever there is a CEO change, it's a board decision. It involved the whole board, and both Rick and I were members of the board. The board looked at all the options, and we agreed that this was [the] best way to go forward. It's something I'm excited about doing.
Is Rick still on the board?
Hughes: No, Rick has left the board.
Will there be a change of direction for the company?
Hughes: There's two pieces to our strategy. The first piece is a strategy we have now of using software to provide more value to the customers for things like ease of deployment and subscription-based pricing. I think we're on the right path there. We'll make a few adjustments to speed up the process.
The second thing that's important is, people look at Silver Peak as a WAN optimization company, but if you actually look at what we've achieved in last two years, we've been building a competence in virtualization and helping companies virtualize network functions. We want to build on that expertise. I think you'll see fruits of that over the next 12 to 24 months, not only in the way our sales transition from hardware to software, but also in terms of the breadth of solutions that we offer.
How has WAN optimization changed in the eight years or so that companies like Silver Peak and Riverbed have been around?
Hughes: There's still a big opportunity in WAN optimization, but I'm not sure that it will always be called WAN optimization. I do think over time the technology may be more directly applied to particular customer problems rather than sold into the network group as a complete WAN [optimization] solution.
What we've been doing in backup and replication with our VRX product line is taking our technology and targeting it at the storage admin. A lot of those people have a problem with replication or meeting RPOs [recovery point objectives] or RTOs [recovery time objectives], but they're not looking for WAN optimization, they're looking for a solution to their replication problem.
So do you expect to move deeper into storage and WAN replication?
Hughes: Yes. Storage and replication is a very exciting area for us. That's part of what software opens up for us. Software lets us reach customers in ways that you can't with hardware. We've always been aligned with storage partners, and those partnerships have been blossoming and growing as we move to software. It's much easier to work together when the solution can be deployed as software.
Is disaster recovery the main use case for your storage and WAN replication customers?
Hughes: Disaster recovery is one of [the] main drivers for storage and replication. A lot of VRX deployments start off as point-to-point replication between two sites. They try it for one pair of storage systems, they like what they see, and then they tend to come back and buy more.
You've done a lot of work with EMC in recent years around support for its platforms such as VPLEX and Isilon. What other storage partners do you work closely with?
Hughes: We're doing a lot with Dell's Compellent and EqualLogic groups. We also have a partnership with Hitachi Data Systems. Although there is no formal arrangement with NetApp, SnapMirror is a major application for us, and we do a lot of joint promotion.
How does VRX help replication in storage systems?
Hughes: We make existing replication run faster with VRX. We don't do the actual replication, but the rate of data transfer will be increased by a factor of five to 10 times, or perhaps 15 times. They can replicate more data and shrink the RPO and RTO times.
What's been the market reaction for your software for storage admins?
Hughes: Typically, WAN [optimization] is aimed at the networking group and you need access to routers to try it out. With VRX, the storage admins can do it themselves. We've made WAN optimization easier to deploy. The storage admin can download the software, install it and get [it] up and running in about 20 minutes. They can do that without involving anyone from networking.
Are your new customers mostly using software?
Hughes: We sold more software units than hardware last quarter. That's from zero a couple of years ago, so that transition is moving quickly.
Will your hardware products go away eventually?
Hughes: I suspect there will always be some customers who want hardware, but that will become a smaller and smaller percentage of customers. Still, it's important for us to have both offerings.
We have hardware investment protection -- customers may convert from hardware to a virtual product at any time without having to re-buy. If a company says, "We're not quite where we need to be from a virtualization standpoint, [but] in two years we may want to go virtual," then in two years they can decommission the physical hardware and use that license for a software version of the product.
Where does the cloud fit into your strategy?
Hughes: We recently made VX software available on Amazon Web Services in hourly increments. You can purchase and deploy Silver Peak from within Amazon on an hourly basis, as well as through annual subscription and perpetual licensing options. We integrate more tightly with Amazon and they measure usage.
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