Dear Apiary,
It is difficult to estimate what would be the fate of a company in the
future, but it seems that the answer is positive. Many analysts now
evaluate that Packeteer is suffering from increased competition that
would cast hardships on its financial performance.
The wide-area network (WAN) optimization controllers [WOC] market
reached a revenue of some $411 million in 2004. Its market leader is
not Packeteer (despite being a major player), but Stratacache
<http://www.stratacache.com/>, with 28.8 percent share, "having
successfully focused on large organizations with hundreds or thousands
of end-point locations. Strong performance by Network Appliance (21.6
percent), Packeteer (18.6 percent) and others demonstrates that this
market is dynamic, with the possibility of significant shifts in
position,", is the claim made by Gartner analyst Joe Skorupa (SOURCE:
TechWeb News, "Application Acceleration Market Nears $1 Billion",
April 11, 2005, <http://www.techweb.com/wire/networking/160700670>).
Saying that, Packeteer is the leader is WAN traffic management, and
faces competition mostly from Peribit (recently purchased by Juniper),
as well as the smaller player mentioned in your question. Some (though
a bit outdated) information on Packeteer itself sees things is
available from its revenue statement from April 2004, at :
Form 10-Q on 30-Apr-2004
<http://biz.yahoo.com/e/040430/pktr10-q.html >
With such a dynamic market, predictions are hard to come by, and
competition is one of the only things we could be sure of. Packeteer
has just reported an increase in profit, in comparison to last year's
first quarter (SOURCE: "Packeteer® Inc. Announces First Quarter
Financial Results", Press Release, Packeteer site,
<http://www.packeteer.com/company/news/pr.cfm?pr_ID=50733>).
On April 27th, "Analysts at Adams Harkness downgrade Packeteer
(PKTR.NAS) from "buy" to "market perform." They explained that "the
company is headed for increased competition, given the acquisition of
Peribit Networks by Juniper Networks. Dedicated devices, such as the
ones offered by Packeteer, are likely to be rendered unnecessary once
Juniper Networks is able to incorporate application acceleration and
compression into edge security and switching devices in the data
center, the analysts say. Adams Harkness expects Packeteer to make
small acquisitions in order to boost its revenue growth." (Source:
Adams Harkness, "Packeteer downgraded to "market perform", New
Ratings.com, <http://www.newratings.com/analyst_news/article_799647.html>).
Next Innig technology report, available at
<http://www.nextinning.com/index.php> also covers the same challenges
for Pecketeer. It is available for $149 on that site, but you could
get a 30-day complimentary trial for a full report. The report focuses
on the market, including the acquisition of Peribit Networks by
Juniper Networks (and its impact on Packeteer and on the market in
general).
Both Peribit and Riverbed (as well as Expand) have been developing
sequence caching and compression solutions, "use a single mechanism to
reduce WAN bandwidth requirements while reducing latency". This,
according to Gartnet, would be an important theme in 2005 (SOURCE:
"Emerging Application Acceleration Equipment Market Tallies $1 Billion
in 2004, Says Gartner",
<http://www.tekrati.com/T2/Analyst_Research/ResearchAnnouncementsDetails.asp?Newsid=4827>).
The full Gartner Report on the status of the WOC market is available
for $1495 at :
Joe Skorupa
Market Share: Application Acceleration Equipment, Worldwide, 2004
Gartner Report, 29 March 2005
<http://www.gartner.com/DisplayDocument?id=476260>.
Packeteer faces a front also with Exinda?s optimizers, given a recent
aggressive campaign to calling the customers to ?toss their Packeteer?
and buy Exinda instead. (See: Byron Connolly, ?Toss your Packeteer,
says TechPlus?, CRN Australia, 21 March 2005, <
http://www.crn.com.au/story.aspx?CIID=22138&r=inbodylk> ).
However, two things should be taken into account. The first is the
rate of development and R&D in the companies. Packeteer claims to be
on the verge of "announcing a new compression algorithm specifically
designed to reduce as much as possible the volume of traffic that
needs to cross the WAN to transfer a file." (SOURCE: Tim Greene,
"Storage networks get help from WAN accelerators", APRIL 28, 2005,
Computer World, <http://www.computerworld.com/hardwaretopics/storage/story/0,10801,101377,00.html>).
After the purchase of Mentat, Packeteer hopes to develop new
technologies that would also help it stay on the top and more
importantly, to expand to new markets, such as the government and
military sectors. Packeteer might attempt, just like Peribit (Juniper)
to approach the satellite-based solutions market-share: ?Satellite is
emerging as a hot area for vendors of devices that improve application
performance. In October, for example, Packeteer?s rival, Peribit
Networks Inc., announced a partnership with iDirect Technologies, a
manufacturer of satellite networking equipment. The two companies
agreed to "reference sell" Peribit?s SR-15 and iDirect?s iNFINITI
satellite networking devices into their existing customer bases?
(SOURCE: James Rogers, ?Packeteer Makes Mentat Purchase?, Dec. 22
2004, Next Gen Data Centre, <
http://www.next-gendatacenterforum.com/document.asp?doc_id=65061>).
To that, you have to add a general tendency of the clients as reported
by Greene to start and combine different devices/solutions and for the
companies to specialise in specific types of optimisation: " Peribit,
Riverbed and Swan Labs address other types of traffic, as well as file
sharing specifically. Expand Networks, whose gear performs a range of
WAN optimization, says it has its version of file-sharing-enhancement
software in beta tests." (Greene, Op Cit). If Packeteer could suit
itself to this new condition, it might benefit. Another sign of these
developments could be read at:
Bob Francis, ?Packeteer, Visual Networks aim for large networks?,
March 21, 2005, InfoWorld, <
http://www.infoworld.com/article/05/03/21/12NNvisual_1.html>
An audio interview with on the challenges Packeteer will face could be found at:
Brad Shimmin , ?CEO Minute: Packeteer's Dave Cote?, Network Computing,
Mar 28, 2005 < http://www.nwc.com/showitem.jhtml?docid=1606ceo-packeteer>
I hope this answers your question, within the limits of having the
problem of predicting anything in the future. Please contact me if you
need any further clarifications on this answer before you rate it. My
search strategy was to search for the companies names, for reports on
the market, and for general news on the subject. |
