What about Cisco?

Implications: Riverbed has great technology

Cisco is coming on strong, as are Juniper and Citrix

The other players may face an uphill battle

Analysis: Riverbed has won their place in the sun by providing great solutions.  It's a justly earned place and their reward (aside from the IPO) is to start battling the big players - Cisco, Juniper and Citrix, not to mention a bunch of smaller players - F5, Packeteer, etc.  Not perhaps the reward one would hope for, but at least it's recognition of success.

This market has been around for several years in one form or another, but it has never become really big - until now.  Many of the articles mention the drive to centralize IT resources and use products such as Riverbed's to allow quick access to them in a central location.  That is certainly a real driver, but it hasn't really changed much in many years, so why is the market suddenly growing?  Perhaps it's because companies are becoming more decentralized now.  A few years ago only very large companies were truly multinational, but today even relatively small companies ($10-20M) typically have their corporate offices divided between continents.  This environment is driving huge increases in WAN traffic, and solutions such as Riverbed's are key to controlling costs and providing good service.

The bad news for Riverbed (and their other competitors) is that Cisco and Juniper share this opinion on WAN futures.  Cisco in particular is making a major push into this market space.  Their first steps have been a bit feeble, but Cisco (like Microsoft) is known for working at a problem until they get it right.  It's highly likely, given the massive resources Cisco has committed to development in this area, that in the near future they will have a product set that is fully competitive with Riverbed's.  Where Cisco goes Juniper is likely to follow.

Riverbed  has excellent technology and a partnership with HP that gives them credibility, so they'll likely succeed.  Regardless of how much the market is growing, however, it's clearly going to be an uphill battle for many of the smaller players in this field.