WAN optimization for free?

 

I recently purchased a new PC for my personal use.  One of the most annoying aspects of getting a new computer is the huge number of "free" applications installed by the manufacturer.  Other than a select few such as Acrobat Reader and Skype, most of the free applications--America Online, Napster, QuickBooks Financial Center, Shutterfly, and numerous others--are of dubious value.  When I paid my money to the computer store, I was buying the computer's features--3GB SDRAM, 400GB HD, etc., and the free programs had absolutely nothing to do with my purchase.  But since they were free, it's hard to complain, other than about the inconvenience of having to remove these useless applications from my new computer.

But offering free products--including free software--is obviously not a viable long-term business strategy.  So why do some vendors offer products for free?  In some cases the vendor wants to seed the market with free products in the hope of spurring customer demand.  Vendors that resort to this strategy usually have a hard time finding customers who are willing to pay money for their products, at least initially.  In other cases the vendor hopes to squeeze out competitors and claim market share.  Internet Explorer comes to mind in Microsoft's successful campaign to vanquish Netscape with a functionally comparable product.  But this strategy is only effective if the free product provides similar capabilities to the targeted competitive product.  Since Internet Explorer is included for free in every Windows product, Microsoft can claim significant market share for web browsers.

In the WAN optimization market there are a number of vendors who offer WAN optimization capabilities for "free."  Of the larger, more prominent vendors, Cisco is known to bundle WAAS modules into their ISR routers at no additional cost to the customer, particularly for customers who place large orders for those ISR routers.  Because the inferior WAAS product is at a competitive disadvantage to the Riverbed Steelhead solution, Cisco has had no choice but to discount it heavily, and at times even offer it for free, in order to entice customers to accept it.

Another vendor that offers WAN optimization for "free" is Blue Coat.  The ProxyClient software is distributed at no charge to customers who buy the ProxySG appliance, and the MACH5 WAN optimization features are included at no cost to Blue Coat customers who purchase ProxySG for web security and web filtering.

While offering free products can affect market share statistics, they don't necessarily do anything to improve the viability or value of the free products themselves.  Similarly, just because Blue Coat's ProxySG customers get WAN optimization features for free doesn't mean they will necessarily use the ProxySG for WAN optimization.  Blue Coat's customer forums (http://forums.bluecoat.com) have plenty of healthy and lively discussion by ProxySG users on its security and web proxy features, but there is almost no discussion at all about the ProxySG's WAN optimization features.  It seems that most ProxySG users have found Blue Coat's WAN optimization features to be as useful as the free 90-day subscription to AOL that I got with the purchase of my new computer; in both cases, the "free" features go unused.

Comments

[PaidformyWDS]

Give it a rest. This is such unbelievable FUD. Do you think people keep products alive if they have to give it away for free? Business 101. Show some hard data, please.

[Josh Tseng]

I don't understand what is so unbelievable about my blog. Perhaps you can clarify what you mean. There are many vendors that give away free products. It happens all the time and you don't have to take Business 101 to know that. It just means that the vendor subsidizes those free products with revenues from other product lines. Cisco subsidizes WAAS from their many other products, and Blue Coat subsidizes MACH5 with their web proxy/web security business.

Josh

[PaidformyWDS]

Why would anyone believe you when you're not giving even a hint of credible evidence?

Just because you say so?

I heard Riverbed will be giving away Atlas for free when it comes out, just like how they've been giving away Steelhead Mobile, the CMC, and heck, even the appliances, too!

Evidence, please.

[Josh Tseng]

Hi PaidformyWDS,

I appreciate your skepticism, but note that this is a public forum. If you want evidence, then contact me directly at jtseng@riverbed.com, and I will provide you with the "evidence" provided that you identify yourself to me. Let me just say here that I talk to Cisco WAAS customers all the time. Many of them have replaced their WAAS devices with Steelheads, or they are currently in the process of doing so, and a number of them have told me what they paid for them. As far as Blue Coat, here are a few Blue Coat press releases about their "free" WAN optimization products:

http://www.bluecoat.com/news/pr/2042

http://www.bluecoat.com/news/pr/47

Best of luck to you.

Josh

[PaidformyWDS]

You make a claim publicly but can't share supporting evidence in public? Bogus. Why should anyone trust your claim? I'm sure Cisco and Blue Coat have a number of Riverbed take-outs too, where the customer would happily say they were given the equipment at an extreme discount.

Further I would bet they would be happy to share the data publicly only if the customer agreed to it, AND, if the customer didn't agree to it, they wouldn't advertise it to the world.

By the way, when should we expect the next round of >90% win rate garbage from you guys?

[Josh Tseng]

This is a blog and a public forum, and our customer information is confidential.

Among those who seriously evaluate Riverbed in a competitive situation, our win rates are unchanged. They are what they are. What I can say is from my personal experience is that most Cisco WAAS customers I talk to did not seriously evaluate Riverbed prior their original ill-fated purchase of WAAS.

Josh

[PaidformyWDS]

So you advertise to the world on the forum that you have confidential information that you are willing to share if someone reaches out to you directly? What if I reach out to you directly, gather your information, and then tell your customers (who told you in confidence) what you are doing? Not very trustworthy.

[Josh Tseng]

What I mean is that after getting in contact with you and verifying that you are indeed a potential customer who is interested in Riverbed, I would put you in direct contact with a former WAAS customer who is now Riverbed customer. We have a number of them who are willing to speak confidentially as references.

After all, this is a public forum...there could be Cisco employees trolling these blogs. Sometimes, I get the bizarre feeling that they could even be posting messages under a ficticious alias. Do you think that is possible? Well, perhaps not, because I have no evidence.

Josh

[PaidformyWDS]

And do you not think that your competitors have similar customers that are willing to do the same?

[Josh Tseng]

I'm not aware of very many Riverbed customers who are willing to give up their Steelheads, much less give them up to deploy WAAS. Our customer satisfaction ratings are off the charts according to a variety of sources, including Network World. I'm not saying it couldn't ever happen, but it would be very unusual from my perspective.

Josh