Here’s from their 10-K where they describe their “product and technology”, which is comprised of both hardware and software from pages 4 to 6.
Page 7 refers to their customer support for both hardware and software, and the section on customers references T-Mobile as their largest customer at 10% of their revenue ( no other customers comprise over 10% of revenue. Report also references AWS.
As of December 31, 2016, GIMO had over 2,300 end-user customers, including 81 of the Fortune 100 and 418 of the Fortune 1000.
Page 8 says they compete with ANET and CSCO. so perhaps similar to how many initially thought ANET was. hardware company, GIMO may turn out to be a hybrid of both.
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I believe this answers the recurring revenue question…
A significant portion of our revenues come from new or recurring purchases of products from our installed base of end-user customers. Our future success depends, in part, on our ability to increase the adoption of our products within and across our existing end-user customers and future end-user customers. If we fail to expand existing deployments or sell additional products to our customers, our ability to grow our business and improve our operating results and financial condition would be adversely affected.
Need someone on this board with far more tech-Savy and investment expertise than I to interpret this and determine if GIMO’s software component and infrastructure as a service creates a situation where they have the kind of recurring revenue those of us on this board are seeking.
Interesting to see the partnerships and business relationships they have with SPLK PaloAlto Networks and CSCO, etc. in order to make their deliverables happen.
Caution, this gets long…
Products and Technology
Our Visibility Platform is comprised of a range of custom software and applications that in combination reside on high-performance, modular purpose-built hardware, or run as virtual machines in private and public clouds. The traffic intelligence applications and capabilities provide advanced controls for traffic selection, forwarding, manipulation, modification, de-duplication, SSL decryption, correlation, sampling and generation of flow records. Our physical appliances are based upon a combination of commercially available hardware components, processing resources and storage devices. Centralized control across the Visibility Platform is provided by the GigaVUE-FM Fabric Manager software suite, our multi-node orchestration system.
These products enable our end-user customers to design and deploy Visibility Fabric architectures optimized for a range of scale and performance requirements from monitoring in virtualized server environments, and from 1 Gigabit appliances to multi-Terabit chassis-based solutions. The majority of our GigaVUE products are modular and extensible, enabling our Visibility Platform to be deployed on any size infrastructure and to scale as the environment grows.
Our product portfolio enables customers to deploy an architecture that delivers pervasive and active visibility to data-in-motion across their infrastructure. The product portfolio encompassed by the Visibility Platform has three major categories:
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Visibility nodes powered by GigaVUE-OS software that offer a set of built-in services
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Traffic Intelligence applications powered by GigaSMART
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Orchestration engine powered by GigaVUE-FM
Collectively, the above components form a distributed set of physical and virtual visibility nodes that aggregate traffic, optimize traffic to precisely identify data of interest and deliver the data to interested applications/tools that consume this information.
Visibility Nodes: The visibility nodes in the Gigamon Visibility Platform can be physical appliances or, virtual appliances for both on-premise and public cloud IaaS.
GigaVUE physical visibility nodes are high-performance appliances that form the foundation of a distributed fabric. These hardware visibility nodes are modular and extensible for a range of scale and performance requirements from 1 Gigabit 1RU (“RackUnit”) nodes to 2.4 Terabit-14RU chassis-based solutions. Our hardware visibility nodes are offered in two primary product lines:
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GigaVUE H Series: These intelligent visibility nodes are offered in a variety of form factors optimized for different locations in the network ranging from branch offices/remote sites (GigaVUE-HB1 or GigaVUE-HC1) to highly demanding data centers / private clouds / mobile switching centers (GigaVUE-HC2, GigaVUE-HD4 or GigaVUE-HD8). A key characteristic of the GigaVUE H Series is integrated GigaSMART traffic intelligence and other custom hardware modules without the need for another discrete appliance.
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GigaVUE TA Series: These nodes are traffic aggregators that collect network traffic from different segments of network infrastructure. The GigaVUE TA Series nodes are optimized for cost and do not support native GigaSMART traffic intelligence. However, by clustering GigaVUE-TA Series nodes with GigaVUE H Series nodes, GigaSMART traffic intelligence can be extended to traffic from ports that are physically resident on a GigaVUE TA Series node. This ability to mix-and-match multiple nodes allows flexible designs that maximize the reach of visibility without compromising the intelligence required for rich visibility.
Both the GigaVUE H Series and GigaVUE TA Series run a common operating system, GigaVUE-OS.
Visibility nodes may also be deployed in a software form factor (GigaVUE-VM) and are typically instantiated as virtual machines. GigaVUE-VM supports VMware ESXi, VMware NSX and OpenStack/KVM infrastructure. We are currently a design partner of VMware. Our visibility solution for VMware NSX is currently certified by VMware and features Service Composer integration to enable automated deployment of visibility when virtual networks are deployed with VMware NSX.
For public cloud environments, a new type of visibility node (GigaVUE V Series) enables aggregation of traffic from virtual taps in the AWS public cloud. The GigaVUE V Series nodes will integrate the GigaSMART traffic intelligence applications. By combining the GigaVUE V Series deployments in the public cloud with our physical /virtual visibility nodes on-premise, organizations can gain pervasive visibility into their hybrid IT infrastructure while still managing the hybrid visibility infrastructure from a common orchestration layer (GigaVUE-FM). Our visibility solution for AWS is offered on a term basis, where the end-user customer purchases the offering for a specific duration based on the number of monitored points in its infrastructure. All other software products are offered as a perpetual license.
Access to network traffic to feed our visibility nodes is performed by:
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Mirroring traffic from a network device using a SPAN (Switch Port Analyzer) session.
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Using a physical test access point (“TAP”). We offer a broad range of passive and active TAPs. Our G-TAP series of TAPs provide non-intrusive access to physical traffic at various network interface speeds-1Gb (Copper or Fiber), 10Gb, 40Gb (including Cisco 40Gb BiDi) and 100Gb. Customers can deploy our G-TAP series products to provide economical connectivity between network traffic and the rest of the Visibility Platform. In 2015, we introduced a new series of modular, high-density 10Gb/40Gb/100Gb TAPs called the G-TAP M Series to address the growing demand for high-density TAP deployments.
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Tapping into the underlying virtual switch in environments such as VMware ESXi and VMware NSX.
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Using a virtual TAP agent. We offer a virtual TAP agent (“G-vTAP” agent) for OpenStack and public cloud (Amazon Web Services) environments when those environments do not provide the underlying facility to tap into the traffic. Traffic from these agents is aggregated by the GigaVUE V Series virtual aggregator.
Traffic Intelligence: Our traffic intelligence applications offered via the GigaSMART suite, enable organizations to profile, shape, refine and enhance the traffic before delivery to a security or management tool. Our GigaSMART applications are offered on purpose-built GigaVUE H Series appliances for optimal performance. Our V Series virtual appliances in the public cloud integrate a subset of GigaSMART applications.
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Our GigaSMART suite of applications offers a number of significant benefits, including the ability to:
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Extract data of interest from massive volumes of network traffic and minimize tool overload. Network traffic can be “searched” for specific signatures of interest to extract packets or entire sessions containing the data of interest.
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Reduce unnecessary traffic. When traffic is monitored across different network segments, duplicate copies of the same network packet may be collected. Our de-duplication application eliminates redundant traffic that is not relevant to the task being performed, reducing wasted bandwidth, storage and processing resources.
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Extract flow records and metadata. Many security tools (e.g. Security Information and Event Management tools) are not efficient in handling traffic feeds due to the overhead and cost of indexing. The NetFlow/IPFIX GigaSMART application, together with metadata extensions, addresses this pain point by generating flow records and metadata that is more easily consumed by such tools.
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Enhance data privacy protection measures. GigaSMART applications such as slicing and masking are able to remove or obviate confidential or personal information and in doing so play an important role in ensuring data privacy.
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Uncover blind spots. The “SSL Decryption” GigaSMART application is able to decrypt traffic that would normally be invisible to security and monitoring tools and in doing so uncovers blind spots and hidden risks within the data-in-motion. In February 2017, we announced a new feature enabling our customers to decrypt and encrypt SSL traffic ‘in-line’ of the production network. This new feature is scheduled to be generally available in April 2017.
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Increase subscriber-aware visibility. Correlate traffic from split control and data planes (e.g. in a mobile network) to extract entire sessions corresponding to specific subscribers.
Orchestration engine: GigaVUE-FM is a software application that provides centralized orchestration and a common policy framework for deploying the Visibility Platform. GigaVUE-FM delivers a single pane-of-glass view of all the physical and virtual nodes across the Visibility Platform, while also providing an easy-to-use wizard-based approach for configuring our patented Flow Mapping and GigaSMART traffic policies.
In addition to centralized orchestration, GigaVUE-FM features fabric-wide reporting, scheduling capabilities, backup and restore functions and enhanced monitoring capabilities to proactively monitor and troubleshoot hot spots in the visibility infrastructure. Our GigaVUE-FM also features a broad range of out-of-the-box integrations with VMware vCenter, VMware NSX Manager, OpenStack, Amazon EC2 APIs, Amazon CloudWatch, as well as tools such as Splunk, Viavi and other customer applications. The open-standard REST Application Programmer Interfaces (APIs) form the basis of our programmable Software-Defined Visibility infrastructure. GigaVUE-FM is sold as a licensed product available at multiple tiers and can manage up to 250 discrete physical GigaVUE visibility (hardware) appliances and 1000s of virtualized visibility software nodes.
To complement our visibility nodes and software applications, we offer a range of supplemental components and accessories including modules, cables and transceivers. The transceivers are offered in a variety of form factors, including SFP, SFP+, QSFP+ and QSFP28.
Together, the various components in the Visibility Platform provide traffic aggregation, filtering, replication, traffic intelligence and orchestration capabilities to optimize traffic for the tools to better manage, secure and understand critical data-in-motion in a customer network. Changes can be made dynamically without impacting the production network so network, security and cloud operations teams can be agile and responsive to threats, events or anomalies on the network.
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Customer Support
We offer ongoing technical support with our hardware and software products, including those sold directly to our end-user customers and through our channel partners. Our primary support offering provides two-tiered support levels, including premium-level support coverage. Certain channel partners offer their own additional support services to the end-user customer and then rely on our support organization for more complex support requests. We offer our end-user customers ongoing maintenance services for both hardware and software, which enable them to receive ongoing software updates, bug fixes and repairs. These services are sold to end-user customers typically for a one-year term at the time of the initial product sale, and customers may choose to renew for successive annual or multi-year periods. We also provide end-user customers with expedited replacement for any defective hardware. Our support personnel are based in Santa Clara, California, Reading, United Kingdom, Hong Kong, and Singapore.
End-User Customers
As of December 31, 2016, we had over 2,300 end-user customers, including 81 of the Fortune 100 and 418 of the Fortune 1000. Our Visibility Platform can be used in a broad range of applications and has been adopted across many vertical markets including finance, high-speed trading, insurance, healthcare, higher education, government, e-commerce, technology, telecom and service providers. For fiscal 2016, one end-user customer, T-Mobile US, Inc., accounted for approximately 10% of our total revenue. No other end-user customer accounted for 10% or more of our total revenue during the periods presented.
On page 8:
Technology Partners
We have ongoing non-exclusive relationships with a number of leading vendors of network management, analysis, compliance and security tools, including arrangements with Check Point Software Technologies Inc., Cisco Systems, Inc., CA, Inc., Dynatrace Corporation, ExtraHop, ForeScout Technologies, Inc., Fortinet, Inc., FireEye, Inc., Imperva, Inc., LightCyber, LogRhythm, Inc., Palo Alto Networks, Inc., Plixer International, Inc., RSA (the Security Division of EMC Corporation), Riverbed Technology, Inc., Savvius, Inc., SevOne, Inc., SolarWinds Inc., Splunk Inc, VMware, Inc., and Viavi Solutions Inc., some of which include the joint development of use-case and reference architectures that enhance the performance and efficiency of the end-user customer’s infrastructure. We expect to continue adding more technology partners and to publish joint case studies with these partners following end-user deployment and approval. In addition to joint development of reference designs and case studies, we have undertaken various joint-marketing activities and events to drive interest and awareness of the combined solution as well as the power of visibility in our solution. As our solution helps optimize the efficiency of our tool partners’ management, analysis, compliance and security tools, we believe these vendors improve awareness at end-user customers of our solution and create new deployment opportunities.
Competition
The markets in which we compete are highly competitive. We expect competition to intensify in the future as existing competitors bundle new and more competitive offerings with their existing products and services, and as new market entrants introduce new products into our markets.
We compete either directly or indirectly with certain Ethernet switch vendors, such as Cisco Systems, Inc., Brocade Communications Systems, Inc. and Arista Networks, Inc., and network management, analysis, compliance and security tool vendors, such as Netscout and Ixia, which recently announced that it had entered into a definitive agreement to be acquired by Keysight Technologies, Inc., that offer point solutions that address a portion of the issues that we solve. In the future, we expect to compete with new market entrants, which may include our joint-development partners or other current technology partners.
The principal competitive factors applicable to our products include:
•functionality and performance;
•price and total cost of ownership;
•ease of use;
•flexibility and scalability of deployment;
•brand awareness;
•product reliability and quality;
•interoperability with other products;
•the extent and speed of user adoption; and
•quality of service, support and fulfillment.
Although we believe that we compete favorably with respect to the above factors, we believe that other competitors may emerge with new technological approaches to the problems we solve, greater name recognition, longer operating histories, well-established relationships with end-user customers or channel partners in our markets, broader product portfolios, the ability to bundle competitive offerings with other products and services, larger intellectual property portfolios and substantially greater financial, technical, personnel and other resources than we have. We expect competition and competitive pressure, from both new and existing competitors, to increase in the future.
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If our end-user customers do not continue to purchase our products or expand deployment of our technologies, our ability to grow our business and improve our operating results and financial condition may be adversely affected.
A significant portion of our revenues come from new or recurring purchases of products from our installed base of end-user customers. Our future success depends, in part, on our ability to increase the adoption of our products within and across our existing end-user customers and future end-user customers. If we fail to expand existing deployments or sell additional products to our customers, our ability to grow our business and improve our operating results and financial condition would be adversely affected.
Our sales cycles can be long and unpredictable, and our sales efforts require considerable time and expense.
We have experienced difficulty managing lengthening and increasingly unpredictable sales cycles in the past. Our sales efforts involve educating our end-user customers about the use and benefits of our solutions, including their technical capabilities. End-user customers often undertake an evaluation and testing process that can result in a lengthy sales cycle. Also, as our distribution strategy typically leverages a channel model, utilizing distributors, the level of variability in the length of sales cycle across transactions has increased and made it more difficult to predict the timing of many of our sales transactions. We spend substantial time and resources on our sales efforts without any assurance that our efforts will produce any sales or a material amount of revenue from such sales. In addition, product purchases are frequently subject to budget constraints, multiple approvals and unplanned administrative, processing and other delays. These factors, among others, have in the past led to, and could continue to result in, long and unpredictable sales cycles.
We sell our products primarily to enterprise IT departments and service providers. Our sales cycles typically range from three to six months and are generally longer for larger transactions. Often times, our larger transactions are part of larger data center projects or upgrades by our customers and we have little ability to influence the timing of these transactions. As a result, our sales cycles can often be more than six months, with sales cycles involving service providers taking significantly longer to complete. To the extent that the mix of our future sales shifts to include relatively more revenue from service providers, the average length of our sales cycles will likely increase. Furthermore, our sales to federal, state and local governmental agency end-user customers have increased in recent periods, and we may in the future increase sales to governmental entities. Selling to governmental entities can be highly competitive, expensive and time consuming, often requiring significant upfront time and expense without any assurance that some of these efforts will generate a sale. As a result of these lengthy and uncertain sales cycles and the increasing size of our transactions, it is difficult for us to predict when end-user customers may purchase solutions and accept products from us. If we are unable to effectively manage the sales cycle or if we fail to close a large transaction or multiple smaller transactions that we expect to close in a given period, our operating results may vary significantly from period to period and may be materially adversely affected.
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