Riverbed Company Overview
Riverbed Technology has revenues reported that fall between $773 million and over $1 billion. While the company has had some financial setbacks (revenue dropped by 13% in 2019) and recent changes to its CEO and CFO leadership, Riverbed has a solid reputation as a leader in WAN optimization and is making strides to stay relevant in the technology field by moving into the multi-cloud. Full details about Riverbed’s position, financials, and challenges are presented below.
#1: RIVERBED COMPANY DETAILS
Company Overview & History
- Riverbed Technology creates solutions so that its business customers can “maximize the performance of their networks and applications.” The company fulfills its goal of “maximizing [its clients’] performance and visibility” through providing WAN optimizations, application acceleration (SaaS accelerator), software-defined WAN, and network performance monitoring.
- Riverbed was founded in 2002. It originally went IPO in 2006 with a valuation of $631.4 million.
- By December 2014, it was reported that Riverbed was “bowing out of public trading” and delisting to retool in a $3.6 billion takeover deal with private equity firm Thoma Bravo. The take over was a strategy to allow the company to “reach the next level of growth.”
- In April 2016, Riverbed launched a new product suite, SteelConnect, facilitated by the acquisition of Ocedo, and use of its SD-WAN technology.
- In 2016, the company was reported to be looking at re-entering the stock market through its second IPO. News articles reported lukewarm reviews about this move. Riverbed did not provide any comment.
- The company has had some recent top leadership changes. In October 2019, Rich McBee took over as CEO. By December 2019, the company had hired a new CFO, Ian Halifax.
- Riverbed lists more than 60 products on its website. Each product is housed within a product family (SteelConnect, SteelHead, SteelFusion, SteelScript, and SteelCentral).
- Riverbed divides its products into several sections, use cases, and solution families. However, the following products were the most noted in the media:
- The company’s SteelHead product is credited with being a big part of its success. “It was fast to deploy and easy to manage, and customers couldn’t get enough of it. One network manager once described SteelHead as ‘network crack’ because once you put it in the network, you need to have more and can never take it out.”
- Riverbed’s SD-WAN product, which is part of the company's SteelConnect solution is noted to severely cut implementation time for business customers. “Through SD-WAN, Riverbed enables organizations to move faster and more securely by making distributed IT more efficient and providing greater agility and performance to deliver better customer, partner, and employee experiences.”
- Riverbed’s Digital Experience Management (DEM) “is the only end-to-end solution that enables organizations to measure and manage the digital experience—by monitoring device-based end-user experience, infrastructure, applications, and networks.”
Number of Employees
- Riverbed reported on its LinkedIn profile to have between 1,000-5,000 employees.
- Another source (former CEO presentation), notes that in 2017, Riverbed had 2,600 employees. Yet another compilation source lists the employee numbers as exactly 2,271.
- Riverbed specifically focuses on providing services to “the world’s largest organizations.”
- Enterprise companies are prominent clients of Riverbed Technology. One of its customers, GHD, is a global provider of professional services focused on water, energy, environmental, and transportation markets. Other companies Riverbed has served include Michelin North America, Hilton Worldwide Holdings, and Allianz SE.
- Riverbed tailors its solutions to “branch offices, mobile workers, private data centers, private clouds, and cloud computing.”
- Riverbed is known as a “WAN optimization specialist.” Another source noted that “Riverbed was the face of WAN optimization.”
- Note that some experts believe that Riverbed’s prior success with WAN optimization became a curse since it didn’t allow the brand to move into adjacent markets.
- Riverbed is also known to have high customer service scores.
- The company is listed as one of the major players in the global LAN/WAN test equipment market.
#2: RIVERBED FINANCIALS
- The initial research revealed that Riverbed was a private company with limited financial information published publicly. Because the company is private and there did not appear to be more direct sources that credibly reported Riverbed’s financials, an estimate of its revenue ($773 million) was initially obtained from ZoomInfo.
- Riverbed reported its 2012 revenue as $837 million.
- While several sources reported the $773-million figure as Riverbed’s revenue, one source (VB Profiles) reported that Riverbed’s annual revenue was “more than $1 billion.”
- In 2014, when Riverbed Technology was still a public company, that year’s revenue was reported as $1.09 billion.
- In its listing on the “Best Small Companies Hiring in the US,” Forbes reports that Riverbed’s earnings from sales were $773 million. However, the listing was from a time when Riverbed was reported on a list of Forbes’ 100 best publicly traded companies (before December 2014).
- It appears the popular $773-million figure may have come from a presentation by former Riverbed CEO, Jerry Kennelly in 2017. In addition to the familiar figure, the presentation notes that the revenue in 2017 was $1 billion.
- To get more updated and direct figures, the research team reviewed interviews with top leaders at Riverbed who might be able to attest to the company’s revenue (e.g., Rich McBee, President, and CEO; Ian Halifax, CFO; Dan Smoot, COO; and Jack Kennelly and Paul Mountford, former CEOs); however, no interviews listing these details were available. Instead, most articles focused on leadership shifts. After searching through news articles and industry reports—and based on the company’s privately-held status—the research team concluded that no primary/direct information about Riverbed’s revenue was available online.
- A company profile compilation resource reported total funding for Riverbed to be $28.4 million. Crunchbase also reports a total funding amount of $28.4 million; however, Rockstart reports total funding as €25.8 million.
- Riverbed received its funding over six rounds:
- Riverbed received its first stream of venture funding (late VC round) on October 13, 1999, for $11.8 million. The investors were Mayfield Fund, Columbia Capital, and FBR Technology Venture Partners.
- On January 10, 2003, the company closed its Series A funding round at $6.6 million; investors were Lightspeed Venture Partners and Accel.
- On January 6, 2004, Riverbed completed a Series B funding round that closed at $10 million. Accel, Lightspeed Venture Partners, Goldman Sachs, Meritech Capital Partners, and Pelion Venture Partners were investors in the round.
- The company received venture funding on February 1, 2006, in a Series D round but that amount is unavailable. Investors were Accel, Lightspeed Venture Partners, Goldman Sachs, Meritech Capital Partners, Pelion Venture Partners, and BYU Cougar Capital.
- Likewise, seed funding was listed for July 2015 and January 2016 but those funding amounts were not disclosed. Investors in both rounds were Mayfield Fund, Columbia Capital, and FBR Technology Venture Partners.
- The former CEO of Riverbed reported its total addressable market as $20 billion.
- Riverbed Technology is currently $2 billion in debt.
#3: RIVERBED SWOT
- Riverbed reports having more than 30,000 business customers including 98% of the Fortune 100 and 100% of the Forbes Global 100 companies. Additionally, the company has major partnerships with EMC, Microsoft, VMware, Dell, and Amazon Web Services. Despite some financial challenges and other setbacks, Riverbed is known for being “the” source for WAN optimization, great customer support and service, and has major associations and partnerships with global giants.
- Riverbed is a community-minded company that markets its efforts within its community. For instance, in November 2019, Riverbed announced that its “REACH OUT Volunteer Week” helped more than 25 global charities and that 700 of its employees exceeded 2,000 hours of community service.
- Considering that the company was struggling to maintain its position brought on by sales challenges since 2014, and continued to struggle in 2017 through 2019, Riverbed’s finances are a substantial weakness.
- In August 2019, it was reported that Riverbed posted a 13% annual revenue decline. In November 2019, Riverbed was described as a “struggling IT firm” that was “burning through its cash.” The Wall Street Journal reported that Riverbed “burned through $50 million in the quarter, compared with a $33 million cash burn over the same period a year ago.” Other reports note that Riverbed’s revenues had fallen three straight quarters as of June 2019.
- Another weakness Riverbed is currently experiencing is that the company is struggling to “hang on to its customers amid changing technology.”
- Some time near mid-2019 Riverbed began to transition to a multi-cloud infrastructure. This change was a major shift for the company as it moved “more than 200 applications, including flagship apps that were moved to public clouds over a two-year period.” This marked change is an opportunity for the company because in 2018, it struggled to surpass its reputation as a WAN leader and pick up additional segments in the market; this major move to a multi-cloud environment might allow that change.
- Riverbed has struggled financially for several years, and likely as a result, the company has spent those years making major changes to its C-suite, particularly its CEO. In 2018, co-founder and CEO Kennelly stepped down, allowing Mountford at the helm. Mountford stepped down after 1 year, David Murphy was a very brief interim CEO, then McBee was confirmed. Additionally, the company has a new CFO.
- Riverbed has major and very successful competitors in its space including Cisco and Citrix.