Riverbed CEO Rich McBee: 'We've Returned To Our Roots'

‘The company is stable and performing today. During the period of the restructuring, the company wasn't any of those things,’ says Riverbed CEO Rich McBee, who shared how the firm is now laser-focused on its core specialties.

No More ‘Bouncing Around’

Network and application performance vendor Riverbed has, by its own admission, bounced in and out of various networking businesses over the last few years, leaving customers and partners confused about the firm’s long-term strategy. But Riverbed CEO Rich McBee, who took over at the helm as the company's leader in October, has been working hard to trim the business down to its core WAN optimization, SD-WAN and application acceleration focus.

The San Francisco-based company earns nearly 90 percent of its revenue through the channel, so partners are “wildly important” to Riverbed, McBee said. With that in mind, the company unveiled its new sales strategy to the channel in-person in January during its annual sales kickoff, an event partners hadn’t been invited to for nearly five years.

And Riverbed’s reconfirmed commitment to the channel and streamlined, simple strategy is starting to pay off. McBee sat down with CRN to talk about the firm’s 2019 restructuring, how it’s going after the competition, and what partners can expect. What follows are excerpts from the conversation.

Riverbed has entered and exited several markets in recent years. What is your strategy for the company now that you're more than 100 days into the job as CEO?

A lot has happened over the last few years. I think part of that is we've returned to our roots as a company. One of the things I found when I got to Riverbed is that there were a lot of things going right. But I think it was a little bit fragmented in terms of focus. That's one thing that we've really worked on -- focusing back on our core network performance, application performance, and visibility into networks and applications. Over the last five years, I think that there's been a lot of forays into different things, but today, I can tell you today that Riverbed is a hyper-focused company, specifically on performance and visibility of networks and applications.

We have four pillars to our strategy. The first one is around WAN Optimization and it's an area where we've always been strong. We're going through a refresh now, which is a great opportunity for our channel partners. From our WAN optimization, we've moved to SaaS acceleration and we have a great new set of capabilities that we're introducing into the market around accelerating SaaS. One of the highlight applications and one we really do well, is Office 365, which is a big issue because people are running into speed and latency issues. The third pillar of our strategy is around network performance management. We've always been a leader in that space, and we continue to focus on that as a big piece of our revenue. It's a great product for our channel partners because it's very sticky for those that have managed services. The fourth piece of our strategy is around the software-defined WAN. We have a great partnership with Versa Networks and we take that product to market with our channel partners and also some of our largest service providers.

What did 2019’s restructure of the firm accomplish?

I think there’s a couple things. First, the company is stable and performing today. During the period of the restructuring, the company wasn't any of those things. We had high potential, but a lack of focus. The layoffs were because we were getting out of some businesses. We were doing a lot of things, but we weren't doing a few of those things really great.

Now we're in a growth mode. I think part of part of the challenge that riverbed had was there were a lot of extra resources focused on things that weren't core to the company. Those were taken out and now I think the company is really poised for the future. We're really focused on delivering profitable growth. We're seeing our sales organization is selling the four pillars and seeing good performance in our network performance management, SD-WAN, and SaaS acceleration. We expect WAN optimization to be in a slight decline.

We've got this really great company alignment which didn't exist before. And we did it pretty fast. I also took our customer support organization and put that all in one channel organization. I simplified all selling -- both pre-sales and post-sales support is in the same organization, so it gives us a lot more speed. What we've really done is try to destroy as many silos as we could. We're all focused on the same thing, and we are seeing the benefits of that.

Is Riverbed making any changes to its channel program as the company works on returning to its roots?

We have the Riverbed Rise program, which has been really well-received in the market. Every year, we take a [look at] what do we need to make sure that we modernize, so that the program is simple, flexible, and drives possibilities for our partners. For example, this year in 2020, we have a new set of dividends or credits for our channel partners around the refresh and trade-up deals. As I said, one of the pillars of our strategy is to refresh this large installed base. We've aligned credits for people that have [are doing] refreshes and incentivizing them and monetarily rewarding them for refreshing that base. That's one of the tweaks that we made this year in the program.

What trainings and certifications is Riverbed offering for partners today?

We have really good training for our own people, and I think our training for our channel partners has been kind of spotty. We have a large sales force to augment our channel partners. Partners are realizing that their customer base wants them to add more value, so one of the big changes we did in our sales kickoff this year is that we made a couple of commitments. First of all, that our channel was there. Second of all, that they were getting the same, transparent training that we're giving our account managers. Third was the commitment that we made that said; ‘Look, we're not going to train ourselves and then sometime after the future, train the channel. We're going to train simultaneously.’

What we need from the channel is to actively participate in this training. And I can say, since we've launched that in early January, the feedback has been very good, the participation has been excellent, and the interest has been very high. [We wanted to] make sure that we're giving the same training so that [partners] are credible in front of the customer base. I think part of what’s been very positive for our channel is over the past several years, Riverbed has been in and out of businesses -- kind of half in half out. I think our channel and our customers have had a hard time trying to say who Riverbed is this week. Now, we are rifle-shot focused on our strategy. And the nice part about it is I've heard a lot of people say, this strategy, the focus with four pillars, is not only exactly the right thing for the market, but it's the right thing for Riverbed.

How is Riverbed competing against the competition today?

The key thing when we think about the four pillars of our strategy is it all works on the same appliance. We have WAN optimization competitors and network performance management competitors, and we basically no competitors for SaaS acceleration. But nobody can run on the same appliance. That's the key differentiator for us.

For our channel partners, one of the things that we're working with them on is telling them; ‘Look, we have a massive install base – we’ve got over 300,000 Steelheads out there, the classic WAN opt appliance – and we have tens of thousands of customers. So, go back out, refresh those because we have a new generation of our WAN optimization product, and then start to sell them on SaaS acceleration and lastly, our SD-WAN capability, which has really resonated well with customers. We're really getting great traction around this very simplified strategy of returning to our roots around visibility of performance and network applications.

Is Riverbed thinking about making any acquisitions soon to round out its portfolio?

If you think about the four pillars, we own optimization, and we're great at SaaS acceleration, so we can run that play. I think in the network performance management market, there's a lot of players in there today -- the major players, such as us -- and I think that market is ripe for consolidation at some point. We just keep adding micro features that used to be a company specialty into our core solution, so that's why I think our growth is very strong in that segment. I think with SD-WAN, we want to see that play out for a while. It has about 65 players, and there is no defined standard at this time. I think that that one would be one that we would sit back and watch.

If you were to see us do anything, maybe a small technology bolt-on, or maybe network performance management, and we'll keep an eye on the other ones. Right now, I'm just totally focused on the company's performance and we don't have any technical deficit or holes in our portfolio. We’ll always have an ear to the market, but for 2020, not a major consolidation.

What’s your message to partners right now?

The channel has to modernize like we're modernizing. They have to have a plan to go from the traditional, on-premise [environment] to cloud. They have to have a plan to make that transition with their customers, because their customers are our customers, and the ones that are not making that transition are going to get left and that's going to put us at risk of getting left behind. Channels are a critical part of Riverbed’s go forward market strategy.