Silver Peak Bets Big On Virtual WAN Op With New Customer Upgrade Program


Silver Peak Systems has launched a new program that allows customers to upgrade from its hardware-based WAN optimization appliances to its virtual appliances free of charge. The program, announced Monday, represents the latest step by Santa Clara, Calif.-based Silver Peak in its transformation from a hardware- to a software-focused WAN optimization player.

The upgrade program is also the first major announcement to emerge from Silver Peak under new CEO David Hughes. Hughes, the original founder of the company, took the helm in June, following the retirement of former CEO Rick Tinsley.

After launching Silver Peak in 2004, Hughes tapped Tinsley for CEO of the company, and took on a role as CTO to focus more on Silver Peak's technology. Now, as CEO, Hughes has charted an aggressive course for Silver Peak, in which the company's focus will shift almost entirely from WAN hardware to virtualized network services.

 

[Related: The 10 Coolest Networking Startups Of 2013 (So Far)]

Hughes said Silver Peak's new focus on software is a result of the growth it's seen with its VX-series line of software-based WAN optimization solutions.

"About two or three years ago, we introduced a virtual appliance, a software version of the product. Starting from one product, we expanded that to a full range of products, going from the low end all the way to the high end in terms of performance," Hughes told CRN. "Over the last two years we have seen a dramatic shift in the uptake in the software version of our product. We have gone from 100 percent hardware to, basically, more than 50 percent software now in terms of what we are selling from the point of view of units."

Hughes attributed this growth to the fact that Silver Peak's virtual VX-series delivers the same data replication functionality as Silver Peak's hardware-based NX line, but through a software-based model that is easier to deploy and offers greater flexibility in terms of both use and cost.

"It's been a very fast shift that, I think, has exceeded even our expectations," Hughes said. "And what's really driving that is that software is really, really compelling for our customers."

Apart from being faster to deploy and upgrade than hardware-based WAN appliances, one of the things customers like most about the virtual VX-series, Hughes said, is the more flexible pricing model. One recent example of this is Silver Peak's new partnership with Amazon Web Services (AWS). Announced in June, the deal makes Silver Peak's WAN-optimizing Virtual Acceleration Open Architecture software available by the hour directly from the AWS marketplace.

Customers can access the software in a variety of network capacity options, as well as through annual or perpetual licensing, using -- and paying for -- only what they choose.

Hughes said it was too early to disclose how many customers have accessed Silver Peak's software via AWS, but said he expects the offer to take off.

"With software, we're able to do very interesting things with pricing, doing things like subscription-based pricing where people pay by the year, or usage-based pricing, say, in conjunction with Amazon, where they can buy WAN optimization by the hour," Hughes said. "Things like this, they are familiar concepts for software companies. But it's a new thing in networking. And what's been really exciting is to see how quickly people are embracing these options."

NEXT: Silver Peak's Upgrade Program