Network World Blog missing the boat on Packeteer’s decline in revenue

The one thing bad about being a publicly traded company is that you cannot hide from your declining sales, in the following network world blog post and related comments ,the authors make some good points as to where and why they would choose Cisco Wan Optimization over Blue Coat and vice-versa. They also comment on all sorts of reasons why Blue Coat’s revenue in this area is declining , although they neglect one obvious reason.

Prices of bandwidth have fallen quite rapidly over the last 10 years. In some larger metro areas  Internet access runs for as little as $300 per month for 10 megabits. The same link 10 years ago would have run close to $5000 per month or more. Despite falling bandwdith prices,  WAN optimization solutions from the likes Blue Coat, Cisco and Riverbed, remain relatively high.  Many ptential WAN optimization customers will  simply upgrade  their bandwidth rather than invest in new optimization equipment.  You would think that vendors would lower their prices to compete, and they are to some degree; however the complexity of their core solutions requires a mimumum price floor.   The factors that create the price floor on equipment are related to, methodology  of the internal technology, and sales channel costs,  and unfortunately these fixed cost factors cannot keep pace with falling bandwidth prices .

Our prediction is that WAN optimization devices will  slowly become a commodity with automated reduced complexity. One measure of the current complexity is   all the acronyms being tossed around describing WAN optimization. The sales pitches filled with accronyms clearly corrolate that perhaps these devices are just too complicated for the market to continue to use. They will become turn key simple and lower cost or die. No player is bigger than the Market force of cheaper bandwith.

Related articles:

ROI calculation for packet shaping equipment

Does lower cost bandwidth foretell a decline in bandwidth shaper sales?

3 Responses to “Network World Blog missing the boat on Packeteer’s decline in revenue”

  1. Tom Phelan Says:

    Bingo! The Netequalizer not only costs lest, it also results in better flatter utilization of purchased bandwidth so with it we use more of the bandwidth we paid for. It also saves money because it is a heck of a lot easier to configure and maintain.

    We had been a Packeteer customer for years and invested not only in the product but significantly in training. When I was faced with a $15K bill for replacing an end of life Packeteer device I decided it was time to go another route. I heard about Netequalizer at edAccess (a great peer-to-peer tech conference) and decided to give it a try. It cost me less than 1/5 of what it would have cost me to replace my end of life Packeteer. It literally took me less than one day to know everything I needed to know about the product. Futhermore, during the first year I only had to tweak my initial setup twice. All this, and my results were far BETTER than I had with the Packeteer. Even with constant tweaking, the Packeteer was often too restrictive during off peak times preventing my users from using bandwidth that we paid for and was available. My network utilization is now way up and much flatter. An unanticipated benefit to this is that it has encouraged good behavior in that my users know it is best to save high bandwidth traffic for off hours.

  2. Anete Simpson Says:

    Cool page. When will I get the more details?

    Anete Simpson
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  3. Does Lower cost bandwidth foretell a decline in Expensive Packet Shapers ? « NetEqualizer News Blog Says:

    […] article on Packeteers recent Decline in Revenue Share this:EmailPrintFacebookTwitterDiggRedditStumbleUponLike this:LikeBe the first to like this […]

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