Prospectus Summary
PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. You should read the following summary together with the more detailed information appearing in or incorporated by reference into this prospectus, including our consolidated financial statements and related notes, and the risk factors beginning on page 7, before deciding whether to purchase shares of our common stock. Unless the context otherwise requires, we use the terms “Riverbed,” the “company,” “we,” “us” and “our” in this prospectus to refer to Riverbed Technology, Inc. and its subsidiaries.Riverbed
Overview
Riverbed® has developed an innovative and comprehensive solution to the fundamental problems of wide-area distributed computing. Historically, computing within an organization across wide area networks (WANs) has been plagued by poor performance, IT complexity and high cost. Our Steelhead® appliances enable our customers to improve the performance of their applications and access to their data across WANs, typically increasing transmission speeds by 5 to 50 times and in some cases up to 100 times. Our products also offer the ability to simplify IT infrastructure and realize significant capital and operational cost savings. Our goal is to establish our solution as the preeminent performance and efficiency standard for organizations relying on wide-area distributed computing. We believe that our products and services can provide significant benefits in millions of locations worldwide.
We refer to Wide-area Data Services (WDS) as the market for providing global access to data and applications across WANs with local area network (LAN)-like performance. Unlike alternative approaches, our WDS products and services simultaneously address, across a broad range of applications, the inter-related root causes of poor performance of wide-area distributed computing: application protocol inefficiencies, network protocol inefficiencies and insufficient bandwidth.
Our Steelhead line of appliances utilizes our proprietary software to deliver significant benefits to our customers, including the ability to:
Our products are designed to be deployed more easily and transparently into our customers’ networks than alternative products. Our products are also more easily managed, are scalable across networks of all sizes and address the wide-area distributed computing needs of every major industry.
We began commercial shipments of our products in May 2004. As of December 31, 2006, our products have been sold to more than 1,600 customers worldwide, from large global organizations with hundreds or thousands of locations to smaller organizations with as few as two locations. We sell our products and support directly through our sales force and indirectly through distribution partners, including value-added resellers (VARs).
Industry Background
Technological advances have improved users’ ability to access data and use applications rapidly across their LANs and store enormous amounts of information economically. However, these same applications and storage technologies often exhibit slow performance, data inconsistencies and management complexities across WANs. Poor performance or downtime can pose serious business challenges to organizations that increasingly rely on their networks to be productive and efficient.
The WDS market is large and growing. We regard the millions of remote offices, headquarters and other computing locations around the world as potential sites for our products. The key drivers of demand in this market are the increasingly geographically distributed nature of organizations and employees, the growing business dependence on application performance and real-time access to data and the increasing desirability of consolidation of IT resources to achieve compelling cost, management and data protection benefits.
Historically, organizations have implemented partial solutions in attempting to improve the performance of wide-area distributed computing. These include incremental investments in bandwidth and IT infrastructure resources, as well as caching and WAN optimization approaches. None of these alternatives addresses all of the root causes of wide-area distributed computing problems for a broad array of applications. We believe these performance problems can be best solved by simultaneously addressing limitations imposed by application protocol inefficiencies and network protocol inefficiencies as well as insufficient bandwidth. Application and network limitations include the effects of “latency” (the time it takes data to travel distances across a WAN) and protocol inefficiencies or “chattiness” (the numerous interactions between clients and servers that are often required by applications or network transport protocols to complete an operation or transfer data). The combination of latency and chattiness is a key problem for wide-area distributed computing.
We believe significant demand exists for an integrated, flexible and comprehensive WDS solution that adequately addresses all root causes of the fundamental performance problems of wide-area distributed computing.
The Riverbed Strategy
Key elements of our strategy include:
Corporate Information
We were founded in May 2002. Our principal executive offices are located at 199 Fremont Street, San Francisco, California 94105. Our telephone number is (415) 247-8800. Our website address is www.riverbed.com. Information contained on our website is not incorporated by reference into this prospectus, and you should not consider information contained on our website to be part of this prospectus or in deciding whether to purchase shares of our common stock.
“Riverbed Technology,” “Riverbed,” “Steelhead,” “RiOS,” “Interceptor” and other trademarks or service marks of Riverbed appearing in this prospectus are the property of Riverbed. This prospectus contains additional trade names, trademarks and service marks of ours and of other companies. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.
The Offering
The number of shares of our common stock to be outstanding following this offering is based on 66,180,286 shares of our common stock outstanding as of December 31, 2006, which excludes:
The number of shares of our common stock to be outstanding following this offering also does not include the automatic increase on January 1, 2007 of shares reserved for future issuance under our stock-based compensation plans, consisting of 3,309,014 additional shares of common stock reserved for issuance under our 2006 Equity Incentive Plan, 250,000 additional shares of common stock reserved for issuance under our 2006 Director Option Plan and 661,802 additional shares of common stock reserved for issuance under our 2006 Employee Stock Purchase Plan.
Unless otherwise indicated, this prospectus reflects and assumes no exercise by the underwriters of their option to purchase up to an additional 750,000 shares from Riverbed to cover over-allotments.
Summary Consolidated Financial Data
The following tables summarize the consolidated financial data for our business. You should read this summary consolidated financial data in conjunction with the sections titled “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included in our annual report on Form 10-K for the year ended December 31, 2006 (Annual Report) and in other documents that we subsequently file with the Securities and Exchange Commission (SEC) which are incorporated by reference into the registration statement of which this prospectus is a part.