What should we make of the news that Hewlett Packard's storage business unit is to stop building its own WAN accelerators around Riverbed's RiOS software? The HP StorageWorks Enterprise File Services WAN Accelerator comprised an HP ProLiant server running RiOS but will be replaced with a deal whereby HP's services arm will sell Riverbed's Steelhead boxes.
Riverbed's Mark Lewis casts the change as an improvement: "It means HP will take our products - it has just been part of the network storage group and is now expanding into other areas of HP," he says.
He adds that it's also a "customer scalability issue" - by taking Riverbed's boxes, HP (like McData, which rebadges the Steelhead) will be able to get new products into its customers sooner, without the need to qualify new software versions on the ProLiant first (although presumably HP will still need to qualify upgrades, such as the latest RiOS version 3, before letting them loose on its EFS installed base).
However, one of Riverbed's rivals questions this take on the story, arguing that it could equally well be a sign of a deteriorating relationship.
"A company like HP does not go through the time and effort to market a solution unless it is locked in stone," says Jeff Aaron, product marketing director at Silver Peak Systems. "It is not easy for them to introduce something like this to their channel, and then 'un-introduce' it.
"Also, as far as OEMs go, it is traditionally much more advantageous to work through a business unit than a services arm. The BU is responsible for profit and loss, has a dedicated sales force, and is much more knowledgeable on the technology."
However, while HP would not say whether current EFS users would be offered an upgrade to RiOS v3, it offered a statement which suggests it has realised that while WAN acceleration started out with a strong storage focus, it has now become an awful lot broader than that, impacting on just about anything that runs over the network.
"There has been a refresh of HP's agreement with Riverbed regarding the Wide Area Data services that HP offers," says HP Storageworks marketing manager Stephen Watson. "The effect of this is that the previous Storage agreement will transition to a Network Services Group agreement and allows for HP to have a reseller agreement with Riverbed allowing us to offer the complete range of Riverbed products."
Jeff Aaron points out that Riverbed's OEM deal with McData is also up in the air following the latter's acquisition by Brocade, which already has WAFS technology via its earlier purchase of Tacit, plus a WAN optimisation partnership with Packeteer.
Lewis confirms that the future of the McData arrangement was uncertain. "But the merger isn't likely to go through until January '07, so until then it's business as usual," he says. "This area's been a great revenue stream for McData and we are looking for that to continue."
He notes that four-year-old Riverbed, which is currently heading for an IPO, has grown by at least 30 percent a quarter since shipping its first products in 2004. It now has over 1000 customers, not including those that bought the HP EFS or McData boxes, he says.
And while Aaron points out that Riverbed is not yet profitable (it lost US$10 million in the first six months of 2006) and that its expenses have grown ahead of revenues in recent quarters, Lewis says the company has been busy putting in a new layer of management, including regional marketing VPs, to support its strong growth.