Blue Coat: We are more than a WAN Optimization vendor | Steve Rowland | Vice President – Asia Pacific, Blue Coat Systems | Interviews |


Blue Coat: We are more than a WAN Optimization vendor

Interviewed on Feb 01, 2012 by Yogesh Gupta
Steve Rowland
Steve Rowland, Vice President – Asia Pacific, Blue Coat Systems Blue Coat serves two very fast-growing markets – WAN Optimization and Web Security. We give the highest margins in our channel program compared to Cisco or Riverbed.

Interview Questions

Full Interview with Steve Rowland

CW : How would Blue Coat’s acquisition by Thomas Bravo alter its positioning in IT landscape? Wouldn’t a larger technology vendor seem a better bet than a private equity firm?

Blue Coat CEO has publicly stated our unchanged strategy across two highly strong markets – Web Security and WAN Optimization. Orlando of Thomas Bravo also spoke about their plan to invest in Blue Coat and its initiatives. The partner strategy will not vary either as we continue to be a 100 percent channel company.

With over 15000 global customers, including 90 percent of Fortune 500 companies, Blue Coat has all the right makings of a great tech company. For a long term strategic move, you either get acquired by a big technology company or you seek the right private equity. Many times, the larger vendor loses control of the acquired company and their joint roadmap. Hence, Blue Coat management opting for a PE firm seems just correct.

CW : Riverbed and F5 have a well entrenched customer base in ADN and WAN optimization. You compete with security vendors like Websense too. Isn’t it a tough and diverse competition?

Not necessarily. Even after thirteen years, we have significant market differentiation. For instance, we have 130 patents today and another 63 pending. Web security is delivered much differently than it was two years ago for hardware, virtual appliance, cloud or software. Our’s is one of the few vendors delivering an integrated platform to give flexibility to the customer to deploy the relevant model. We are no longer just a WAN Optimization company but a multi-technology vendor delivering fast and secure experience to enterprise users.

At times, we worked with Websense (web filtering). However, they have not been able to keep pace with threat landscape. Blue Coat appliance and Websense software in tandem is no longer a good protection strategy for modern enterprises.

CW : Data explosion, APT threats, virtualized networks, Cloud security, BYOD et al. It is a huge worry for CIOs but does complex infrastructure signify more business for Blue Coat?

Yes, that’s the reason we are doing exceptionally well. Our value proposition is solving business problems of enterprises. Gartner estimates 50 percent of corporate data (which will be video) will reach 90 percent by 2014. Two years ago, CIOs were planning to block You Tube! Tackling rich media will trouble CIOs a lot. How to accelerate public cloud applications is another trend on WAN optimization side.

We deliver different applications dealing with optimization problems with social media and You Tube, but these platforms are huge security threats like never before. BYOD and social media are disruptive tech trends too. BYOD concept of web gateway means solutions around web access covers everything from inside corporate network, branch, datacenter location, corporate asset. We also deliver web security through thousand plus different applications in Facebook. Due to explosion of smart phones and iPads, we protect iOS devices currently, and will move to Android in the future.

CW : Blue Coat was perceived as a real threat to Cisco and Juniper three to four years ago. Do you still compete with them?

The two biggest competitors are Cisco and obviously Riverbed, Juniper not so much. Frost and Sullivan reported 34 percent share in WAN optimization in India for us. We are one or number two in that space and enterprises would mostly opt for one of these three vendors.

The real need for WAN optimization earlier was file-to-file transfer, either internally or across datacenters. Hence, it was easy for Cisco (through WAAS) or Riverbed to compete few years ago. With virtual desktops, video, public cloud acceleration, markets are changing and this, in turn, is changing the competitive landscape. Apart from the foundation of WAN optimization, we are investing in innovative solutions to address big market trends over the next couple of years.

CW : WAN Optimization is perceived as a technology priority by large enterprises. Do you foresee the next growth trajectory across mid-market and SMBs?

We are strong across enterprises including government, financial services, service provider, manufacturing, and healthcare. Three years ago, there was only the concept of ‘On Premise’ appliance. Today, there is virtualized appliance on VMware, cloud delivered on opex model and other options. India is a highly receptive market for cloud as enterprises here are an early adopter towards emerging technologies.

Blue Coat has been in the cloud space since we have 75 million users on our cloud called Web Pulse. The flexible deployments modes for the same quality of technology will help us penetrate SME segment.

CW : Large vendors including HP, Dell and Brocade are pitching the ‘datacenter architecture’ story to enterprises. Isn’t Blue Coat lagging in the race?

I don’t think we are lagging behind; we are a part of the story. You cannot build next-generation datacenters without focusing on security and WAN optimization. We are the only WAN optimization-approved vendor for SAP. For Virtualized appliance, we partner with VMware. And we partner with Microsoft for WAN optimization. Such vendor alliances are beneficial for partners as they integrate different technologies at the enterprise end.

CW : For past few quarters, partners are a bit confused about the company’s commitment to India business.

Blue Coat’s big growth has been mainly across China and India as more than 21 percent revenues originate from APAC. We also took a strong approach in the last six months by appointing Ambarish Deshpande as India MD. We worked with distributed and authorized partners, premier and elite partners, global/local SIs, telecom providers in an identical manner and that is not the best approach. Each route follows a separate GTM and we are working on the right formula for Indian market.

Blue Coat serves two very fast-growing markets – WAN Optimization and Web Security. We give the highest margins in our channel program compared to Cisco or Riverbed. Sometimes, it is two to three times more, so we are a profitable vendor as well to deal with for partners. We do not go to partners with product bouquet, but utilize their core expertise and integration capabilities to develop the right solutions for enterprises.

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