Market Watch: Fast times for WAN optimisation

22 Nov 2011

This one-time niche market is experiencing unprecedented growth and attention, but while new entrants continue to join the fray, a serious shake-out can’t be far ahead, says Jessica Twentyman.

The WAN [wide area network] optimisation specialists were out in force at the recent VMworld conference in Las Vegas. These are exciting times for vendors that provide this technology: what was once considered a niche is now exciting much wider market attention.

IT market research firm Gartner recently forecast that the WAN optimisation market would hit $1.9 billion in 2011, compared to $700 million in 2006. Over the next five years, Gartner’s analysts expect a further tenfold increase in sales.

Vendors are not about to let the opportunity slide. Riverbed was at VMworld, announcing a partnership with remote desktop delivery specialist Terdici, which the two companies claim will enable customers to reduce the bandwidth consumed by the PC-over-IP (PCoIP) protocol used in many virtual desktop infrastructure (VDI) deployments by between 50 percent and 90 per cent.

Silver Peak was there, too, launching a free version of its WAN optimisation software for virtual environments, as well as an upgrade to its flagship virtual WAN appliance for data centres.

And Blue Coat took the opportunity to demonstrate its VMware-ready MACH5 WAN Optimisation Virtual Appliances for accelerating and optimising email, file access, enterprise applications, video, Web, cloud-based applications and data replication in branch offices and data centres.

But what is sparking customer appetite for WAN optimisation? To a large extent, the market has grown up over the last 10 years around the trend among large organisations to centralise IT resources. When companies move systems, applications and services from remote and branch office locations into central data centres, they’ve often met with serious performance challenges. After all, in these scenarios, users are accessing systems over the WAN, with all the latency that distance introduces, rather than over high-speed local area networks, or LANs.

The problems created were illustrated in a report published earlier this year by market analyst company Enterprise Systems Group (ESG), ‘Remote Office/Branch Office Technology Trends’. When asked to define their top challenges for supporting IT requirements for remote office/branch office locations, IT professionals gave the following top responses:

WAN performance management (37 percent)

Monitoring WAN traffic (34 percent)

Identifying, prioritising and accelerating application traffic on the WAN (32 percent)

Managing latency-sensitive applications like video and IP telephony (30 percent)

WAN optimisation technologies provide a working solution to issues of latency and sluggish application performance. Typically sold in the form of a device (but also, in some cases, as software) that sits on the corporate network, they apply data reduction and compression techniques to the data passing across it. As a result, redundant data isn’t sent out over the WAN multiple times, data volumes are reduced and transfer rates receive a serious boost.

For vendors, new opportunities continue to come thick and fast. The rise of virtualisation and cloud technologies, with its emphasis on centralisation, has only served to boost the market. Desktop virtualisation, in particular, “provides an exciting new use case for WAN optimisation”, according to a recent blog from ESG analyst Jon Oltsik. “The primary job of WAN optimisation controllers is accelerating Sharepoint, Exchange and file access,” he writes. “Lots of vendors do this pretty well, but desktop virtualisation requires new protocol support and may open the market for new equipment or new vendors.”

At the same time, Gartner analysts see a significant opportunity for cloud-based WAN optimisation. “Vendors are developing innovative approaches that make the deployment of cloud-based communications and networking services more secure, reliable and remote,” they report. “Organisations with globally distributed locations should consider WAN optimisation services to eliminate the need for distributed WAN optimisation appliances.”

These dynamics are stirring up a market that is not only fiercely competitive (Silver Peak and Riverbed, for example, are currently engaged in a patent dispute) but already extremely crowded.

In an early 2011 assessment of the market, analysts Tracy Corbo and Jim Frey of Enterprise Management Associates (EMA) identified and analysed a “dizzying array of options” from thirteen companies: Blue Coat, Certeon, Cisco Systems, Citrix Systems, Expand Networks, Ipanema, Juniper Networks, NetEx, Replify, Riverbed, Silver Peak, Streamcore and Xtera Communications. “Fifteen other [WAN optimisation controller] providers were invited to contribute information but declined,” they note.

With the overheated WAN optimisation market experiencing unprecedented attention and growth, it’s clear that it’s one to watch. What is equally clear, however, is that a serious shake-out can’t be far ahead.