Riverbed CEO: Cisco Can't Touch This

Despite a modest rally in the last few months, Riverbed's share price has nonetheless taken a pounding with the rest of the tech sector. The company's shares have fallen 40% in the last 12 months to $9.93 at Friday's close.

The CEO acknowledges that Riverbed's sales will slow in 2009 but still predicts positive net growth. Riverbed estimates first-quarter revenue between $83 million and $86 million, an increase of 14% to 18% on the prior year.

Kennelly also wants to improve on Riverbed's 19% operating margin.

"Our long-term goal once this economic situation is passed is to get up into the mid-twenties," he said.

As for its big-name rival, Kennelly admits that Cisco is a "fierce" competitor with great brand recognition but says that he is not afraid of the networking behemoth.

"We don't compete with them in their strength, which is layer two to three [switching and routing]," he said, explaining that Riverbed is focused on layer four to seven applications such as email and file transfers.

Partnerships will also play a big part in the company's long-term strategy, according to Kennelly.

Riverbed, which recently signed a deal with Hewlett-Packard(HPQ) to deploy its software on the tech giant's networking blades, is also allied with the likes of AT&T(T), Orange and NTT(NTT).

Most notably, the firm recently clinched a deal to offer Microsoft's(MSFT) Windows Server pre-packaged on its hardware. "Microsoft and Riverbed are now BFFS," said the CEO.

In the seven years of its existence, Riverbed has only opened up its wallet once, spending $25 million on its recent acquisition of Mazu Networks.