Radware Falls Further Behind

Radware once was a top-tier player in application-traffic management, back in the late 1990s when the first wave of Internet prosperity flooded technology-industry coffers.

Like F5 Networks and other load-balancing startups of the era — including Alteon WebSystems and Arrowpoint Communications, which were bought for multibillion-dollar amounts by Nortel and Cisco, respectively — Radware was reaping revenue rewards by providing high-availability solutions for busy web-based storefronts.

Radware, though, neither kept pace with F5 nor experienced a spectacular acquisition-based exit, as did Alteon and Arrowpoint. Instead, Radware muddled along, with poor marketing, hit-and-miss channel programs, and weak technology partnerships.

Radware muddles along to this day, as its latest quarterly results attest. The company missed analysts’ revenue and earning expectations, and its revenue growth lags far behind that of F5 and the other major players in what has evolved into the application-delivery space. While F5’s market capitalization is about $2.7 billion, Radware’s sits at less than $277 million. The fortunes of the two companies have diverged sharply.

So, what will happen to Radware? Not much will change. It will continue to shuffle forward, failing to capitalize fully on the markets it enters and only partly seizing the opportunities that come its way.

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5 responses to “Radware Falls Further Behind

  1. I’m a Radware customer. They make great products and have great tech support. I think their management have made many bad decisions, like not marketing the product enough and being agressive enough, and are finally realizing it. I’ve since seen a media blitz from them recently, but only time will tell if it’s too late or not. I had one experience with F5 awhile back, and it wasn’t good, which is why we went with Radware and stuck with them. I wouldn’t rule them out, but then again, it may be too late for them to start getting competitive in this space.

  2. Ridge,

    I agree that Radware is a solid engineering company. They’ve made some very good products. As you say, the problems have occurred at the executive level, not among the engineers.

  3. Brad,

    Also, did you see who they recently appointed their VP of Sales, a former F5 guy (not sure what his position was though)! http://www.radware.com/content/company/press/pressrel/Default.asp?_v=Read&document=7141

    My reseller sells both Radware and F5 and he says Radware makes a superior product.

    It looks like they are starting to inovate again with their SOA/XML support: http://www.radware.com/content/company/press/pressrel/Default.asp?_v=Read&document=7146

    P.S. I enjoy your blog. I’ve added it to my Firefox RSS feed.

  4. I see the other way.. Radware profits are growing.

  5. I wrote that post in 2006. When I wrote it, Radware was struggling. They’re doing better now, but they’ve lost a lot of ground to F5 (and even Citrix’s NetScaler) over the years.

    Now, if you’re looking Radware as a stock play, that’s a different story. In that context, it’s always a question of whether you think the company is fairly valued.

    If Radware can squeeze every ounce of juice from the Alteon installed base, it might run ahead of market expectations for the next little while.

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