Riverbed’s decision this week to bolster its SD-WAN platform by tapping rival Versa Networks highlights the growing challenge of vendors in trying to serve a range of enterprise needs. It may also provide a template for how the SD-WAN vendor space might evolve.

The deal itself will see Riverbed offer Versa’s Secure Cloud IP software platform as a Riverbed-branded service. It will run alongside Riverbed’s SteelConnect platform with Riverbed handling all support functions once the combined offering begins rolling out to customers later this year.

Dante Malagrino, senior vice president and general manager for Riverbed’s Cloud Infrastructure Business Unit, repeatedly linked the deal to Riverbed’s ability to target a broader market set. In answers to email questions from SDxCentral, Malagrino explained that Riverbed’s current SteelConnect SD-WAN product was “well suited for mid-market companies.” He also said it works well for those that are adopting infrastructure-as-a-service (IaaS), software-as-a-service (SaaS), cloud-based security, and internet broadband-based WANs.

However, Malagrino added that Versa’s platform offers carrier-grade routing and advanced security features that are centrally managed and all on premise. He did add that they do require “deep networking knowledge to configure and operate," which is something that Riverbed is looking to help with.

“Versa Networks solutions will allow Riverbed to address the needs of all enterprises and organizations – large or small, cloud-forward or conservative,” Malagrino wrote.

That contention is backed up by Versa’s extensive list of service provider customers. The company last year noted that it had sold 150,000 SD-WAN licenses, which are the equivalent to the number of sites where the technology is deployed. Some of those customers include CenturyLink, Comcast Business, China Telecom Global, KDDI, Singtel, Tata Communications, and Verizon.

Malagrino also countered a question about what the deal might mean for the need to further invest in SteelConnect. He stated that the company would continue to build out that service to target those “mid-market” and “cloud-first organizations,” while “large enterprises and service providers” will be targeted with the Versa assets.

Josh Bancroft, senior analyst at IHS Markit, said the deal will indeed benefit Riverbed by allowing it to meet “specific SD-WAN criteria that SteelConnect cannot match.”

“They can use Versa technology and still have the ability to sell other Riverbed components such as WAN optimization,” Bancroft explained.

Bancroft also noted the deal “indicates continued adoption of SD-WAN from enterprises, particularly with larger organizations who are now seeing the SD-WAN use case proven. Vendors want to ensure they can sell SD-WAN in conjunction with other services to maximize potential revenue deal sizes.”

Those comments, along with Riverbed’s admission that with Versa’s technology it will now be able to “address the needs of all enterprises and organization,” highlight the growing complexity in the SD-WAN market.

Will Townsend, senior analyst at Moor Insights and Strategy, said the deal was not surprising considering “that the last time I checked there were almost 70 players trying to compete in this space.”

“It’s about customer choice and casting a wider net,” Townsend said. “It’s difficult to outspend a company like Cisco, and for some of these mid-tier players they need to somehow get their voices heard above those 70 other vendors.”

A recent IHS chart of the market’s top revenue generators for the fourth quarter of 2018 included 15 named SD-WAN vendors. It also included the always popular “other” catch-all category that itself generated enough revenues during the final quarter of 2018 to rank No. 2 on the list if it were one vendor.

The two top vendors on that list – VMware and Cisco – both bolstered their positions through high-profile acquisitions: Cisco with it $610 million purchase of Viptela, and VMware’s $449 million acquisition of VeloCloud.

Patrick Moorhead, president and principal analyst at Moor Insights and Strategy, in a recent blog post laid out four potential scenarios for vendors in the market. The first is that they go “big, get customers, and go public” in becoming a “traditional vendor.” The second is a merger between vendors with momentum and a similar view of the market to “create a more robust competitive suite to take on the big guys.” Third is that those vendors with truly a unique technology or feature set could be acquired. And fourth is that a vendor simply can’t gain enough traction in the market and folds.

“While everyone seems to have their niche today, the long-term market will want a more comprehensive suite, not a series of niche products, so option two or three is the most likely long-term play for most of the companies,” Moorhead wrote.

Riverbed’s deal with Versa this week would seem to meet some aspects of Moorhead’s second scenario without the actual “merger” complications.

Townsend was not yet ready to state that a merger was in the cards, but he did note that this was "an interesting relationship."