Morningstar Rating

Stock Research and Analysis

by Grady Burkett, CFA

Bulls Say

Riverbed has acquired new products to address adjacent markets, such as network management software, application performance monitoring, and application load balancers. These products should deepen its customer relationships and fuel growth.
An emphasis on software, combined with the use of off-the-shelf hardware components, gives the firm softwarelike gross margins north of 70%.
The company has established partnerships with larger technology firms that either license its software to use on their hardware or resell its products. Read more 

Bears Say

Riverbed operates in a competitive environment against companies like Cisco and F5, which have greater financial resources and stickier customer relationships and are incorporating many of the functions performed by Riverbed's appliances into their own products.
Riverbed faces significant integration risk over the near term as it folds OPNET into its organization.
Management's efforts to diversify beyond its product line could lead to distractions that eventually weaken the firm's dominance in WAN optimization. Read more 

Management

Riverbed was founded by Jerry Kennelly and Steven McCanne, who were previously members of the management team at Web-caching pioneer Inktomi. Kennelly is chairman and CEO, while McCanne recently retired from his role as chief technology officer. Riverbed's   Read more 

Profile

San Francisco-based Riverbed Technology is a leader in wide-area network optimization. WAN traffic optimization is a class of hardware and software that allows distributed   Read more 

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