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.