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NetsEdge Research Group www.netsedgeonline.com |
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(c)2003
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Newsletter -- Week Ending May 7, 2004 |
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InternetAcceleration
News Summary The Best Of Times -- Although Howard Stern's Las Vegas show opened down the street at The Hard Rock, the hottest ticket in Vegas this week was John Chambers' keynote at N+I. It's a delight to see someone in our industry that's at the top of his game and after just having turned in another really good quarter and announcing that sales were up 22%, profits up 23% and plans to add 1000 new employees, Chambers was in rare form. What's really great about listening to Chambers is that he starts off by reminding us that this "infrastructure stuff" that we're all working on plays a really important role and actually can improve the aspects of the world economy -- making technologies available that can significantly increase productivity holds the potential for standard of living increases. And along with Cisco's Chief Demo Officer, Jim Grubb, Chambers can make even the geeky stuff of switching and routing seem interesting. (Grubb does such a good job as Chambers' trusty sidekick that you expect the audience to start applauding when he first comes on stage like Kramer's initial walk on in Seinfeld episodes.) When talking about his direction for future Cisco growth, Chambers pointed to Storage Virtualization. It's certainly an interesting concept -- move storage management cycles from inefficient server technologies to network devices. Funny thing, last week also in Las Vegas at their user conference, Veritas was looking to go "up stream" by moving its storage virtualization franchise into other areas such as systems management. What's that old Satchel Page saying -- "Don't look back, something might be gaining on you?" Maybe there's an interesting potential battle on the horizon as Cisco leads the networking industry push "up stream." Storage Virtualization at the network level may just be one of the those NBT (Next Big Things) that we're always looking for. Cheng Wu's Acopia has already shown its first products heading in this direction. There's more to come… And The Worst -- At the other end of the spectrum was Symbol Technologies CEO William Nuti's disappointing keynote at N+I. The basic theme of his talk was something that their not so clever marketing team has named CM2 or something like that (we'd tell you what the C's and the M's stood for but it doesn't really matter). His grand vision seemed to be something about having data at the edge of enterprise networks, which seems contrary to everything else that's going on these days with simplification strategies based on consolidating information assets. The theatrical highlight of his talk came when he asked the audience to raise their hands if they were using more mobile devices today than they were ten years ago. Don't ask what he said after that -- I raised not only my hands but my feet as well and left to see if there was still any free coffee left at the media hospitality room. Symbol's a really important company, one that should take a leadership position. But it doesn't look like that's going to happen. Maybe a more honest starting point for their vision is that we're now living in a world of disposable devices -- the cell phone (PDA, mobile device or whatever you're talking about) that you're buying today is not the one that you'll be using a couple of years from now. Describing the world from that standpoint is probably a much more interesting challenge. Is it safe to come out now? Last week we failed to point out that Akamai had turned in its first ever quarterly profits of $2.9M when it reported its highest ever quarterly revenue of $48.4M. Internap also had some good news with slightly increased revenues of $36.3M. With Equinix also reporting good revenue results -- $36.8M up 45% from a year ago, maybe the future is looking better than the past. Combined, the three companies added almost 200 new customers in the past ninety days. White Lists and Spam Control -- How Can This Possibly Work? Last week Microsoft and IronPort announced that MSN and HotMail were going to be part of the Bonded Sender program. For IronPort's Bonded Sender team that was obviously really a really big thing because it was an integer multiplier on the number of mailboxes in back of Bonded Sender. The broader response of many that we talk to (even Spam experts) is "How can this possibly control Spam!?" We think it could be quite important. Here's why. First, Spam is a problem in large part because email transmission costs are so low (especially when spammers are hijacking other people's bandwidth) so it doesn't take a big response rate to make Spamming a profitable activity. The cost of direct mail marketing by post is about $1 per piece. What many have observed is that if you raised volume email costs to a penny a piece (1) it would be much cheaper than postal mail; (2) the cost of the email would be insignificant as part of any managed marketing program and (3) it destroys the economics of Spammers. The question is then how to do that. Some have suggested electronic stamps. Some have suggested computationally intensive and costly encryption. Suppose instead you think of this as trade association fees. First, recognize that both legitimate volume mail senders. Think of big financial institution that have huge potential wins in electronic bill presentment and payment and clever direct mailers that can make very effective specific offers via email. Then recognize that large mail receivers have a lot to benefit by being able to knock down Spam while still passing these legitimate offers. OK then, assume you build a trade association of large mail senders and receivers, funded by the senders at a level that destroys Spam economics. First that association has to agree on high-standards for volume mail use. Let's start with necessary opt in (to receive mail you have to expressed your willingness to get that category of mail) and opt out (if you decide you no longer are interested, that is immediately honored). Let's assume that the trade association fees are large enough to do all that effectively -- vet new members for adequate policy and process, monitor ongoing users for continuing compliance as measured by mail subscriber complaint rates. What's interesting about this solution (and many that we like) is that it makes sense as a business proposition and it is easy to implement. Having put this all in place, mail receivers only accept volume mail from senders who are on the approved list. When you fall off the approved list, they stop. It's a simple information service. Although that's not exactly where Bonded Sender started (why rehash history) that's a reasonable view of where this is now. So let's flip it around to you dear reader: why wouldn't that work? Before you go down some predictable rabbit holes, note carefully that we're only applying this to large volume email transmission -- it won't have any impact on normal email. If it's clear to you why this can't work, please contact us. pchristy@netsedgeonline.com. I've Got The Research Blues -- Since we're in it full time, we don't want to be apologetic about the research business - you actually want to feel some sort of pride in the work that you're doing. Maybe it's just that we're angry old guys anyway but it just seems that the household names in this business aren't living up to the standards of the "good old days." We've got to apologize for the work that's been coming out of our industry lately. First off, there's been a new round of Gartner Magic Quadrants about infrastructure categories, each showing pretty looking quadrants with lots of vendors named in a sort of ambiguous way so that you don't really know exactly where they are in the chart other than the general quadrant that they're in. Vendors that are selling primarily to service providers are lumped in with those selling primarily to enterprises (that's not fair to either vendor or to the users that are trying to use these reports to make important deployment decisions). And there's only a vague description of the criteria that's used to rank these vendors and even less description of the amount of research that's gone into it. At the minimum, you'd need about forty hours a vendor to do enough research to be able to draw a reasonable conclusion to make recommendations. So that means that a ten vendor magic quadrant would represent a much larger research project than what's being shown, with much more meaningful conclusions and recommendations. And there's more. We've been told that a recent IDC study on WAN optimization cites Cisco as having $15M of revenue in this space. Considering that Cisco did about $29 B in sales in 2003, then $15M in the WAN optimization space would amount 0.078% of its business. In our opinion from a research perspective, there's no way that it makes any sense. If it's a business that Cisco is in, then you're talking about a much bigger number -- a company like Cisco doesn't play around in markets that account for only a small fraction of its sales. If it's not a business that they're in, then don't put them in the category. Fifteen million dollars! We're told that the "Other" category in this same table is listed as $16M, which means that "Other" really cleaned Cisco's clock in the WAN optimization business last year! "Other's" sales team must be doing high fives around the office. Memo to IDC -- next year check out Cisco's home page for the list of 15 product categories that it participates in including its Content Networking products which, as you might remember, actually does influence WAN optimization. If they can't get this part of it right, can you trust the rest? What's happening in branch office networking? You're probably asking yourself, after doing all this research bashing "Will these guys actually promote their own branch office report?" Well, you guessed right. We're shameless. But you knew that about us anyway. To help you sort through all the issues of the big changes that are going on in branch office networking, our newest report -- The 2004 Branch Office WAN Communications Technology Report takes an in depth look on how present and future infrastructure technologies can impact WAN application performance. The WAN connected remote office is perhaps one of the most interesting arenas for the evolution of IT and communications technology. There's a lot going on in this space. This new report will focus on the technologies that hold promise to gain customer acceptance in the branch over the next five years. For more information on this report -- www.netsedgeonline.com or send a note to john@netsedgeonline.com. In Box Event Coming Soon! Peter is helping organize and moderate (probably a poor choice of words given his typical conference behavior) the Security & Privacy track for the brand new INBOX mail conference upcoming in June 2-6 in San Jose, that is being organized by our old friend Martin Hall previously Mr. Stardust (and the interesting Stardust infrastructure conferences such as iBand from the good old days.) Martin's one of the best organizers of conferences on important technical areas that we've worked with. All the changes and issues in email provide excellent grist for his mill. We think this is going to be an interesting conference and encourage you to check it out www.inboxevent.com. At the same conference John will be moderating a panel -- Email Content Inspection, It's Not All Negative. Funding News -- Eight infrastructure companies raised $50.3M. In addition, Mitel Networks announced the completion of a $135M financing package consisting of equity investment, debt to equity conversion and expansion of its credit facilities which significantly strengthens the Company's balance sheet and provides additional capital to finance growth plans.
Quarterly Results Summary -- Forgive us for our mistakes - correction from last week: Keynote revenues for Q1 2004 - $9.8M, $1.2M profit and Q4 2003 - $9.7M, $0.67M profit.
Acquisitions announced in the past week -- NaviSite, technology services provider, will acquire Surebridge, managed application services for notes worth $39.5M. Telcordia Technologies acquired Granite Systems for an undisclosed sum. Granite provides Telcordia with critical next generation inventory management space and provides standards-based OSS solutions to wireline and wireless carriers. American Fiber Systems to acquire Marietta FiberNet (MFN), fiber optic transport business. CyberGuard Corporation, network security, is acquiring German high-end content security vendor Webwasher AG. Compuware Corporation announced it has signed a definitive agreement to acquire privately held Changepoint Corporation for $100 million cash. Product announcements -- DataPower announced the XG4 (XML Generation 4) product family of XML chips and modules. Ingrian introduced new software to offload all cryptographic functions from Microsoft application and Web servers. NetScaler, application delivery systems, has made key feature enhancements and added more application intelligent traffic inspection and control capabilities across its portfolio of 9000 Series products. The company also significantly enhanced its SSL VPN capabilities as part of an overall initiative to introduce more fine-grained control and flexibility to its application delivery systems. Akonix Systems, business solutions for secure, managed and integrated multi-network enterprise instant messaging (IM), launched L7 Enterprise v3.0, featuring automatically updated enterprise Spim and Malware Filter to protect networks from the latest IM-borne attacks. Sarvega, a provider of XML networking solutions, introduced the Sarvega Business Integration Module as an optional enhancement to the Sarvega XML Speedway Accelerator and XML Guardian Security products. iAnywhere's Pylon Application Server 6.0 enables deployment of Domino applications using a Web-based architecture and supports client-side business logic, scanning and application management. Meanwhile, RepliWeb, enterprise-class data deployment software, launched R-1 RepliWeb's Distribution Manager Version 3.3, includes business continuity, management and performance enhancements. BridgeWave Communications, technology in upper millimeter-wave wireless communications, announces the availability of the GE60 wireless gigabit Ethernet link. BorderWare Technologies Inc., security appliances, announced MXtreme Mail Firewall version 4.0. MXtreme 4.0 adds new features and functionality in five key areas -- security, policy enforcement, manageability, audit reporting, and availability. BorderWare also announced HALO (High Availability Load Optimization), a failsafe clustering architecture for high availability for the MXtreme Mail Firewall appliance and the company announced MX-1000 designed for large enterprises providing carrier-level throughput for 10,000 or more users per system, for performance and fault-tolerance for high availability in the mail firewall appliance market . Compuware Corporation announced a new version of Compuware Vantage, application service management solution, Compuware Vantage 9.1 a solution to tie infrastructure management to service management. HyperSpace Communications, Internet and WAN acceleration software products, announced availability of HyperSpace ISP solutions. Keynote Systems broadened the Keynote Application Perspective platform by doubling the number of worldwide geographical locations from which customers can measure transaction performance and introducing a version of Application Perspective that offers deep integration with HP OpenView. MX Logic, email defense solutions that ensure email security solutions, has observed that 12 percent of senders of unsolicited commercial email are making efforts to comply with components of The Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act. Partnerships formed -- IBM has expanded its relationship with Equinix and will begin operating within Equinix's neutral Internet Business Exchange center in Singapore in a multi-year, multi-million dollar agreement. Microsoft and IronPort Systems announced initial success with an e-mail accreditation program pilot project they have begun to reduce the deluge of unwanted e-mail sent to Microsoft customers. LiveVault Corporation, provider of online backup and recovery solutions, and Advent Software, investment management, announced a partnership to provide online backup and guaranteed recovery to thousands of businesses in the financial services industry. BorderWare Technologies, security appliances, lauds the recommendations of the National Cyber Security Partnership for federal government and industry on improving cyber readiness to make vendors responsible for shipping products with more security features enabled. Customer Announcements -- Southern University and Lumberton, NJ School District have adopted the Netilla Security Platform as a means of providing students, faculty and staff with secure access to key educational applications from any Internet-enabled PC. MX Logic reports that their customer base has increased 1,288 percent and serves more than 1,700 enterprise, service provider and telecommunications customers, including Hyundai Motor America, The Sports Authority, YMCA and ProLogis. In addition, the company said revenue has increased 914 percent in the last year. MultiCare Health System has chosen Tumbleweed's entire suite of secure communications solutions, including Tumbleweed's email firewall, email encryption, anti-spam service, and secure file transfer products. Max Re Ltd. implemented XOsoft's WANSync solutions to replicate files, insurance database and email servers. Atmel Corporation, semiconductor manufacturer, has strengthened its existing network security architecture with the addition of Fortinet's FortiGate antivirus firewall platform as the primary layer of defense against content-based network attacks. And eCompany Stores has selected RepliWeb's R-1 product for deploying critical web content and application data. Executives on the move -- Former CFO of AT&T, Bob Kavner, becomes chairman of the board of IronPort Systems, email infrastructure products. Proofpoint, message-protection systems, appointed Lisa Kennedy Crooke as chief financial officer. John Gavin named chief financial officer at NaviSite, outsourced hosting and managed application services. Stuart Fuhlendorf joins Isilon Systems, storage systems, as chief financial officer. PGP Corporation, secure-messaging and information-storage solutions, appoints Ray Rothrock to Board of Directors. Azimuth Systems, automated wireless network test equipment, named Carl Meurell as vice president of worldwide sales and business development. Configuresoft appointed Robert Mayer vice president of development. MX Logic, email security solutions, appointed Richard Coons as vice president of channel sales. Yodlee, aggregation technology, appointed Peter Hazlehurst as senior vice president of engineering, Aditya Palande as vice president of data team and Steve Barham as senior director of professional services. Mirapoint names Warren Smith as vice president of engineering. StrongMail Systems, email infrastructure, added Joe Eskey as vice president of sales and Shirish Puranik as executive vice president of engineering and product. NeoScale, enterprise storage security, hired Robert Mines, vice president of engineering and James Yu as vice president of business development. Atomz, hosted enterprise Web site applications, appointed Jeff Goodman as vice president of worldwide sales. Network Physics, network application management solutions, named Robert Hon as vice president of engineering and Michael Lazar vice president of customer advocacy. Stargus, integrated network management and control software, named Rich Higgins, formerly of Time Warner Cable, as vice president of advanced technology. See links below for the complete text of those items mentioned above plus other news. The InternetAcceleration newsletter and www.internetacceleration.com are produced by NetsEdge Research Group. For more information or to keep us updated, contact John Katsaros john@netsedgeonline.com. |
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Product News |
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DataPower First to Break Gigabit Barrier for XML
Processing with its XG4 WML Chip
Ingrian Announces Solution for Securing Sensitive Data
in Microsoft Environments
NetScaler Unveils AppCompress, AppCache and App Expert
for its 9000 Series Products
NetScaler Enhances SSL VPN Solution for Fastest, More
Secure Delivery of All Applications
Akonix Launches L7 Enterprise v3.0 To Eliminate The
Spread of IM Spam and Malware
Sarvega Intros
Integration Module
New Version of Pylon from iAnywhere Makes it Easier to
Manage and Use Mobile Domino Applications
RepliWeb Announces the Release of R-1 v 3.3 for
Enterprise Web Content Deployment and Business Continuity |
BridgeWave Communications Introduces First 60GHz
Wireless Gigabit Ethernet Link Under $20,000
BorderWare Announces MXtreme Mail Firewall Version 4.0
MXtreme Now Industry's First Mail Firewall To Deliver
Zero Downtime, Zero Latency, Zero Message Loss
Compuware Application Performance Management Solution
Reduces Infrastructure Costs while Delivering Excellent Application Service
HyperSpace Announces Acceleration Solution for
Internet Service Providers
BorderWare Tops MXtreme Line with New MX-1000
Keynote Broadens
Application Perspective Platform
MX Logic Sees
Unsolicited Commercial Email Senders Making Some Efforts to comply with the
CAN-SPAM Act |
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Corporate News -- Mergers / Acquisitions |
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NaviSite to Acquire Surebridge, Inc.
Telcordia Affirms OSS Leadership with Granite Acquisition
American Fiber Systems to Acquire Marietta FiberNet Fiber Optic Business
CyberGuard Acquires Webwasher
Compuware to Acquire IT Governance Market-leader Changepoint, Further Optimize,
Quantify and Communicate IT Value |
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Corporate News -- Agreements / Partnerships |
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Corporate News -- Funding News |
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Mitel Completes $135 Million Financing Arrangement
Tao Group Receives
Funding
Quellan Announces $5.5
Million Private Financing Round
Questra Raises $8
Million
Tideway Systems Receives
Second Major Investment
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DivXNetworks Closes Series C Round of Financing
Webify Solutions Raises $7M in Series B financing
Management Software Firm iTracs Secures $16M in B
Round
WideRay Closes Series B Financing Round
InteractNetworks Secures $4 Million in Venture Funding |
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Corporate News -- Executives on the Move |
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Customer Announcements |
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Netilla Networks Sees Strong Demand for Secure Remote
Access in Education Market
MX Logic Celebrates
Two-Year Anniversary with Industry and Customer Milestones
Max Re Ltd. Chooses XOsoft's WANSync for Replication
of Business-Critical Applications
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MultiCare Health System Selects Tumbleweed's Secure
Messaging Suite to Ensure HIPAA Compliance and Fight Spam
Atmel Defeats Network Attacks With Fortinet Antivirus
Firewall Platform
eCompanyStore Selects RepliWeb's R-1 Distribution
Manager for Web Content Deployment |
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