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Global Crossing weighs in on managed WAN optimization opportunity |
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By Kate Gerwig, Site Editor
10 Jun 2009 | SearchTelecom.com |
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Outsourced WAN optimization services increasingly present telecom service providers with a new source of revenue as one of a new generation of services designed to help customers make the most of IP networking. While many carriers have already entered the market, others like Global Crossing are planning to roll out out their own versions.
WAN optimization is linked to a broader trend of managed services, according to CIMI Corp. president Tom Nolle. "Enterprise networking has always been a combination of public network and private equipment," he said. "And from the beginning, the debate has been over how that balance should be struck." According to Infonetics Research, the WAN optimization appliance market went above the $1 billion mark for the first time in 2008 -- an increase of 29% from 2007 -- and service providers are often the beneficiaries.
Enterprise strategy in the U.S. has traditionally been to buy basic services from a carrier and then add on their own equipment, Nolle said. But as the managed WAN services trend takes hold, enterprises are asking their managed service providers to package an equipment vendor's WAN optimization or WAN acceleration product and include it in a managed service offering. And in bad economic times, enterprise willingness to outsource may be greater in that outsourcing exchanges capital expenses for monthly fees.
The timing for is good because as more applications are networked, enterprises and service providers are past the point of being able to throw bandwidth at the problem to eliminate latency that can affect an application's performance. In the millisecond or less that it takes optical signals to make a round-trip, latency can impair an application's performance.
On the subject of WAN optimization services and the opportunity they present telecom providers, we talked to Dave Siegel, vice president of IP Services Product Management at Global Crossing Are enterprise customers uniformly interested in WAN optimization services?
David Siegel: Our customers are very interested in WAN optimization outsourcing but more in Europe than in the U.S. because they are a little more progressive there. We also see a number of customers using hardware- and software-based solutions for accelerating the network. One of our large entertainment customers runs a software-based tool that runs on each PC and basically helps optimize downloads, accelerate file transfers and maximize bandwidth on the network compared with FTP or HTTP downloads.
What problems are customers looking to solve with WAN optimization?
Siegel: They're looking for a way to squeeze a little more out of their network infrastructure. One of the key themes is that TCP is very sensitive to latency. If you have a branch office in Singapore that has to download data from New York City, the latency caused by the speed of light will prevent them from using large circuits to maximum efficiency. Even if they had a full 100 megabits per second, they may not be able to use it, not because of provider performance but because of latency.
Is it easier to sell outsourced services in a bad economy?
Siegel: For now, it's easier to have a service provider do a company's WAN optimization. The boxes aren't cheap, and one of the big names of the game now is finding financing. So providers that are offering these services are seeing great growth.
What are the advantages of offering WAN optimization services for telecom operators?
Siegel: For service providers like us on the network side, if customers are usage based, WAN optimization helps them use more bandwidth, and a WAN accelerator helps them use more bandwidth. If they can't use a full 100 megabits per second, then we don't get to bill for it.
Every customer has a bill commit, and they are billed for usage-based bursts depending on how much they use the links. The more use of the links for file transfers, the more efficiency they can get out of local access links, which drives more utilization. Anything that helps customers drive usage across geographical regions is good for Global Crossing. WAN optimization is a win-win.
How can WAN acceleration help?
Siegel: There is lots of potential to accelerate applications by eliminating the need to retransmit information over the entire WAN. If you use WAN accelerators, you can avoid some of the congestion mechanisms built into TCP that cause the lack of efficiency by tricking the clients on both sides to open their window sizes and utilize circuits to the fullest. Juniper's WAN accelerators are good example. They have a hard drive built into the system that caches certain patterns and can provide additional acceleration for all sorts of applications like database replication and access, and heavy graphics.
What types of customers are interested in managed services?
Siegel: It has a lot to do with whether customers see the right amount of value. Every company goes through phases of outsourcing and then keeping services in-house. The large ones have the most resources internally, but even the largest of the large have a blend of in-house and outsourced services.
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