Since its founding in 2002, Riverbed has become the leader in WAN optimization (according to consultancy Gartner Group, Inc.), and it continues to grow at a rapid clip, as in 39 percent year-over-year revenue expansion in its first fiscal quarter ended June 30. In this installment of the IDG Enterprise CEO Interview Series, Kennelly spoke with IDGE Chief Content Officer John Gallant and Network World Senior Editor Tim Greene about battling with Cisco, the expansion of Riverbed's product line, and big opportunities in the cloud.

Where does Riverbed go beyond WAN optimization? You are a dominant player, but the danger is that you become a one-trick pony. How do you expand the scope of this business?

What we're really doing is layer-seven application acceleration, and that has much deeper implications than simply making a particular land line faster and cheaper than it was.It's something that changes the nature of global IT infrastructure for every major company in the world. Everyone likes a fast line. It was attractive to people because it saves them bandwidth. It's much cheaper to do optimization and compression across the network than to buy bigger links. But then we saw people doing data center consolidation with it, which is moving all the server and IT infrastructure out of branch offices, out of multiple data centers into just one or two. That trend has driven a lot of our growth in the last three years. Our products make that possible because you can't do data center consolidation unless you can give reasonable performance to the people who no longer have local servers.

We woke up one morning about six months ago to discover -- wait a minute -- what we're doing is creating private clouds, because what data center consolidation does is the creation of a private cloud. So, in fact, we've actually penetrated the cloud market.