Riverbed CEO: 'We Can Be One of the Survivors'

Jerry Kennelly, chief executive and co-founder of networking equipment maker Riverbed Networks (RVBD) stopped by the Barron’s offices today after three days of meetings with investors. He offered two takeaways: the company is not for sale, and making his sales forecast this year shouldn’t be hard.

Given that Riverbed shares spiked 9% yesterday, as Eric noted, I asked if RiverBed was for sale, to which Kennelly said, “None of use wants to work for Cisco [Systems (CSCO)] or one of the giants,” portraying Riverbed’s staff as a a tight-knit band of humble software engineers spending all day on their laptops at Starbucks (SBUX). Not exactly the Cisco culture, in other words. Kennelley argues Riverbed “can be one of the real big survivors in tech over time” and so he’d like to go the distance.

He attributes the bounce in the stock to a couple things he’s talked with investors about this week. First, he sees it as no big deal for the company to make sales of $375 million this year, as the company implied last week. As he sees it, “In the last quarter of 2006, we were at a $140 million annual revenue run rate, but we ended up delivering $236 million [in sales] in 2007. So, if we were at a revenue run rate of $300 million in this most recent quarter, we think it’s reasonable to expect we can deliver $375 million this year.” RiverBed did $76 million in the fourth quarter ended in December. And the uses for Riverbed’s gear are newer than for Cisco’s, which means, he thinks, CIOs will cut back on Cisco’s equipment before they cut back on Riverbed’s.

Second, the company has plans to spread its technology further as the year goes on. Today, Riverbed gear is used mainly for speeding up how fast branch offices can fetch data from computers at headquarters. New versions of the company’s switch could improve how efficiently data is moved between central computers within and between corporate data centers, conceivably broadening Riverbed’s addressable market. Kennelly is holding off on details of the product until its formal introduction.