The wide area network (WAN) optimization market has been well defined in terms of technology capabilities required by enterprise end-users. Techniques such as data compression, caching, Quality of Service (QoS) and protocol-specific acceleration have been around for quite some time. From the technology perspective, the market hasn't changed much over the last two or three years.
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Major service providers are using WAN optimization gear from several different vendors to put deliver a set of services that are the best aligned with the needs of end-users.
One of the most significant changes in this market, however, is the emergence of new delivery methods for providing these WAN optimization capabilities to end-users. WAN optimization deployments are no longer described solely as buying a piece of hardware directly from a vendor or value-added reseller, and managing it inside the enterprise. These solutions are increasingly being delivered to enterprises as licensed software, virtual appliances or managed services.
Telecom carriers are realizing that what enterprises really want from their networks is the ability to seamlessly deliver applications. And as a result, they have started partnering with WAN optimization vendors to add WAN acceleration and application performance management services to their portfolios.
The emergence of managed services in the WAN optimization market comes as a result of several trends that are being driven by enterprises, and they can be summarized as the following:
1. Application SLAs are taking over network SLAs. Whether their network is up or down doesn't really tell enterprises much about how they are doing in terms of managing the performance of IT services. As a result, they are becoming more interested in a service-level agreement (SLA) around application performance as opposed to more traditional network-performance-based SLAs, such as network uptime and downtime and Mean Time to Repair (MTTR). In order to meet these requirements, telecom providers needed new technology capabilities so they could guarantee the speed and availability of applications being delivered over the WAN. As a result, they started offering services that can control the delivery of business-critical data, from the point of end-user interaction all the way to the data center. WAN optimization technologies became one of the key enablers of these services.
2. Total cost of ownership is a top evaluation criterion when selecting WAN optimization solutions. As enterprises expand their geographical presence to be closer to their customers, many have significantly changed the topologies of their networks and now have remote locations that have 15 employees or fewer. Purchasing, installing and managing WAN optimization hardware appliances in far-flung environments can be difficult to justify. Therefore, enterprises are becoming interested in managed services that would allow them to achieve all of the benefits of WAN optimization without having to worry about managing these appliances on their own, in each of their remote locations.
In addition, businesses are becoming more concerned about the cost of deploying and managing WAN optimization appliances, and the total cost of ownership (TCO) is becoming one of the top criteria for evaluating WAN optimization solutions. As a result, many are looking to mitigate some of that cost by deploying these capabilities as a service.
3. The WAN optimization product you are using today might not be as effective tomorrow. WAN optimization is no longer just a technology that will let businesses send more data across the network without having to buy more bandwidth. It has become a key enabler of IT projects and new application rollouts. So as organizations undertake new IT projects and roll out new applications more frequently, the WAN optimization solutions they bought one or two years ago to support applications they had at that time, might not be as effective in supporting the applications they are currently using.
The WAN optimization market is a good example of "one size doesn't fit all" and products have different strengths in optimizing certain protocols (like CIFS or MAPI or of new technology rollouts like virtual desktop infrastructure (VDI), cloud computing and VoIP. As organizations experience changes in their IT and business requirements, they are looking for more flexibility in the WAN optimization capabilities they are using. Instead of having to replace their WAN optimization products every year, they are asking service providers to put together a package of capabilities that are the best fit for their current initiatives.
As a result, major service providers are using WAN optimization gear from several different vendors to deliver a set of services that are the best aligned with customer needs. For example, Verizon Business started offering WAN optimization managed services around Juniper's hardware and followed by making Cisco Wide Area Application Services (WaaS) solutions a part of its managed services packages. Verizon Business is also coupling these services with application performance management capabilities from Fluke Networks and InfoVista.
Similarly, BT Global Services offers WAN optimization services and allows end-users to select WAN optimization capabilities from different vendors, including Blue Coat, Riverbed and Ipanema.
4. Managing application performance over the WAN requires different tool sets. Enterprises are realizing that WAN acceleration alone is not enough to ensure optimal performance over the WAN. They are coupling WAN acceleration with products for monitoring network and application performance. This adds more complexity to deploying and managing these toolsets, as end-users have to deal with interoperability and integration aspects while looking to find the best combination of WAN optimization and WAN application performance management tools. For that reason, buying a single service that would provide all of these capabilities resonates with customers.
From a management and service delivery perspective, the best solution for enterprises would be a service built around a single platform that can provide QoS as well as acceleration and visibility. The only vendor enabling these types of managed services is Ipanema Technologies, and some major European service providers are already taking advantage of this solution for their services (i.e. Orange Business Services, British Telecom and Telecom Italia).
Telecom providers in North America are providing services for both accelerating and monitoring application performance, typically by integrating different toolsets. For example, NTT America is providing acceleration services based on Riverbed's technology along with network and application performance monitoring capabilities from Fluke Networks. Similarly, Global Crossing also offers services built around Fluke's Virtual Performance Manager for the performance monitoring and WAN acceleration gear from Juniper Networks.
Telecom carriers have to step up to WAN optimization market competition
Telecom service providers aren't the only ones offering managed WAN optimization services. Competitors include systems integrators such as HP and IBM, as are virtual network operators (VNOs) such as Virtela Communications. Telecom carriers still have a lot of work to do if they are looking to fully take advantage of these market opportunities. Many are still missing some key capabilities for managing performance over the WAN, such as end-user-experience monitoring. And even though service providers are starting to provide SLAs around application performance, many of them are still limiting their offerings to more network-centric SLAs, such as the ability to enforce basic QoS policies.
Service providers are in a good position to address some of the key pain points enterprises are facing, but their ability to take advantage of these opportunities will depend on the role they decide to play in this market. Many of them still have to decide if they are looking to be a true partner to enterprise customers to create a truly innovative set of service offerings, or just another channel for WAN optimization vendors to sell more of their gear to the enterprise.
About the author: Bojan Simic is the founder and principal analyst at TRAC Research, a market research and analyst firm specializing in IT performance management. As an industry analyst, Bojan interviewed more than 2,000 IT and business professionals from end-user organizations and published more than 50 research reports. Bojan's coverage area includes application and network monitoring, WAN management and acceleration, cloud and virtualization management, BSM and managed services.