WAN optimization has long been a mechanism for reducing bandwidth cost and moving more data over a network faster. However, TRAC's upcoming WAN Optimization Spectrum report shows that organizations no longer see WAN optimization deployments as simply a way to better manage capacity of their traditional wide area networks. Five key findings of this state-of-the market study include:

User experience is becoming the key performance indicator for evaluating WAN performance

TRAC's recent survey of 332 users who implemented WAN Optimization techniques showed that the quality of end-user experience is the leading performance indicator for evaluating WAN performance by a significant margin (53% of respondents, compared to 11% for the next highest measure).

This finding indicates that organizations are discovering that traditional metrics, such as network throughput or data reduction, are no longer serving as an overall indicator of how the solution provides value for an end-user. As a result, network administrators cannot focus exclusively on optimization or acceleration capabilities anymore and need to ensure that they have full visibility and control when it comes to application traffic over the WAN.

WAN optimization is not a single market

TRAC's research identified 5 sub-markets for WAN optimization. These are:

Each of these markets have different dynamics, growth rates and unique buyer requirements. As a result, WAN optimization technology vendors fare differently when they are evaluated in each of these areas, while some of them only compete in one or two markets.

Emergence of cloud and mobility is changing the definition of Wide Area Network

Users are increasingly accessing business critical applications on mobile devices, including smartphones, laptops and tablets, from a variety of locations, while expecting optimal quality of user experience. However, traditional WAN optimization solutions were not designed to support these types of use cases. TRAC's WAN Optimization Spectrum study shows that software solutions for optimizing application delivery to mobile devices is the number one technology capability that organizations are looking to deploy in the next 12 months. Currently, only a few vendors are able to provide this type of capability.

TRAC's Spectrum study shows that one of the key reasons organizations are replacing WAN optimization solutions with products from other vendors is ineffectiveness of their existing solutions when deployed in Cloud environments.

As these trends progress, it is becoming increasingly difficult to determine the “edge” of the WAN, the spot where the company’s conceptual framework ends and other vendors or users begin. A Wide Area Network, which previously may have only encompassed the company’s physical locations, can now be thought of as including mobile users, cloud providers and potentially anyone else the WAN optimization technique needs to extend to. The definition of a Wide Area Network is changing and organizations are increasingly finding that traditional approaches for WAN optimization are becoming less effective.

Emergence of new deployment methods

TRAC's Spectrum Study shows that while physical appliances are still the most predominant method for deploying WAN optimization solutions, other methods of implementation, including software and Cloud services, are showing strong growth rates.

TRAC's research shows that organizations who are deploying WAN optimization are still not optimizing 54% of their remote locations. This comes as a result of challenges associated with deploying physical appliances and the inability to cost justify these technology purchases. The innovations in the WAN optimization space and new deployment methods have created a number of new use cases for deploying these solutions and expanded an addressable market for these vendors.

WAN optimization technologies are becoming one of the key enablers of major IT projects

Organizations are reporting that some of the key reasons they are deploying (or replacing) WAN solutions are deployments of technologies such as video, mobility, virtualization and Cloud. Additionally, organizations are increasingly finding WAN optimization technologies effective when dealing with emerging IT management challenges, such as Big Data. The value of these technologies and IT projects heavily relies on network performance and the quality of user experience. For that reason, organizations are seeing WAN optimization capabilities as integral elements when ensuring that they get the most out of the investments that they are making in modernizing their IT infrastructure and bringing their IT services closer to end-users.

These trends are significantly impacting how WAN optimization solutions are being evaluated and deployed. Additionally they are changing the role that WAN optimization technologies play in end-user organizations. The addressable market for WAN optimization solutions is increasing, and the impact of these solutions are spreading across different areas of IT and business and benefiting more users. In addition, WAN optimization has been elevated to a more strategic level in the CIO’s viewpoint. What was once seen mostly as a cost-saving measure now has real strategic impact on the entire organization and addresses some of the key items on CIOs’ agendas. In order to take advantage of this opportunity, WAN optimization vendors need to prove that they are willing to venture out of their comfort zones, innovate and build capabilities for effectively addressing new use cases for WAN optimization.

On October 22, Riverbed acquired CACE Technologies, a network monitoring vendor. CACE provides solutions for network traffic capture and analysis and it is also a sponsor of Wireshark project, an open-source network monitoring tool that is being deployed by millions of end-users. CACE's products will become a part of Riverbed's Cascade business unit and Riverbed stated that Wireshark will remain a free tool.

This acquisition can impact Riverbed's market position in three key areas.

1) WAN Optimization

Riverbed has been experiencing a lot of success in the WAN optimization market and many of their competitors find it difficult to compete with data reduction and the acceleration capabilities of Riverbed's Steelhead technology. Even though WAN acceleration techniques alone are enabling organizations to improve application performance over the WAN, due to complexity of WAN traffic, organizations are increasingly looking for WAN optimization solutions that couple acceleration techniques with capabilities for visibility into WAN performance.

Riverbed responded to this trend by acquiring a network visibility vendor, Mazu Networks, in January of 2009. Even though the Mazu acquisition allowed Riverbed to add advanced network monitoring capabilities to its portfolio, it didn't significantly impact Riverbed's position in the WAN optimization market, as Mazu products were provided as a separate product offering from Riverbed's WAN optimization gear through the Cascade business unit. Riverbed did take several steps to tighten integration with Cascade solutions, but it hasn't provided both acceleration and visibility capabilities on a single platform, which is the approach that vendors, such as Exinda, Expand Networks, Ipanema Technologies and Silver Peak, have being using to create competitive advantages.

The acquisition allows Riverbed to enhance visibility capabilities of their WAN optimization solution by integrating CACE Pilot with their Steelhead appliances. CACE Pilot is a solution for analyzing network performance and using it to process data that is being collected by Steelhead appliances will enable Riverbed to provide WAN acceleration and visibility capabilities through the same platform.

- Aryaka Networks Launches a Cloud Solution for Application Delivery to Remote Sites -

Today, Aryaka Networks came out of stealth mode and announced its cloud solution for WAN optimization. The solution is based on a number of globally distributed points of presence for WAN optimization that sit on large carrier networks around the world. Aryaka allows organizations to deploy WAN optimization capabilities by using a SaaS platform and set up WAN optimization techniques in only a few clicks, without having to deploy any additional hardware.

The biggest area of change in the WAN optimization market over the last three years has been the delivery method of these solutions. The majority of announcements that have been made by WAN optimization vendors were centered around turning their hardware solutions into virtual appliances or enabling their products to better support managed WAN optimization services. This trend has been driven by the end-users’ request to simplify the management of WAN optimization solutions, reduce the total cost of ownership, support different network topologies and make these products more appealing for organizations that are deploying virtualization and cloud computing services. Aryaka’s solution takes this a step further and provides an innovative approach for addressing some of the key concerns that end-user organizations have about deploying WAN optimization solutions.

The trend of moving WAN optimization hardware out of the branch has been resonating with end-user organizations and a majority of WAN optimization vendors have been doing a good job of trying to adjust to it. However, Aryaka is not only taking WAN optimization solutions completely out of the branch, but also moving them outside of corporate firewalls, providing an almost CDN-like infrastructure for delivering these capabilities (which should not come as a surprise if you know that the founder of Aryaka was also a founder of Speedera Networks, a CDN company that was acquired by Akamai in 2005).

In October of 2009, when we launched TRAC Research, we based our approach for covering IT performance management technologies on two advises that we were given by end-users:

• Don’t evaluate products by throwing them into technology buckets, but talk about what these products can do in specific usage scenarios

• Distinguish impactful from “cool” technologies, meaning discover what are the measurable business benefits from deploying a technology solution, not how “hot” the technology is

We thought that the best approach for doing this would be to launch an end-user survey and ask folks that are using this technology what their experiences are. This is when things started to get really messy. Before we even formulated the questions, we conducted close to 150 interviews with end-users, executives of technology vendors, prominent writers and some true thought leaders in this space to make sure that the questions are spot on to what they care about. Just to clarify, none of us are rookies in this space and for me, this is the 18^th survey of this type that I’ve created. Although, this time, launching the survey was more “interesting” than usual.

2010 could be a very eventful year in the IT performance management market. It is already becoming apparent that virtualization technologies are moving from lab environments to production, and end-user organization are gaining a better understanding of what cloud computing really means for them and how it should be managed. Also, performance monitoring concepts such as “aligning IT with business”, “end-to-end management of application performance” and “making performance data more actionable” are no longer marketing terms. End-users are now able to translate each of these terms into a set of specific technology capabilities, those that are really needed to achieve their IT management goals. These trends are putting additional pressure on leading IT management vendors to expand their product portfolios and differentiate from the competition.

Even though the majority of large IT management vendors have similar visions of where this market is headed, it is becoming apparent to most of them that they cannot execute these visions by solely depending on their marketing, sales and product development muscles. Their competitors are already getting ahead by acquiring vendors that are leaders in their markets (i.e. Compuware acquiring Gomez, CA acquiring NetQoS, etc.) and many of them will have to act quickly before someone else grabs those few leaders or truly innovative solutions in the various IT performance management sub-markets that are left.

This three-part article series will cover our predictions about the 10 technology companies that are likely to be acquired in 2010. In the first part, we’ll start with two technology vendors, both of which are providing different flavors of application acceleration and traffic management.

When talking to end-users I often get questions like: who are the WAN Optimization vendors that should be on our “short list”? And it is nearly impossible to answer this question without asking them 10 or so questions, such as: how many network locations does your company have, how many users per location, what applications are your company running, what IT projects are you looking to support, what are your security and compliance requirements, etc.

If we are talking about an end-user company that has thousands of locations, an average of 30+ users per location and is looking to conduct a data center consolidation, companies like Ipanema Technologies and Silver Peak are very likely to be on their list. If we are talking about a company that has less than 500 employees, has a relatively small IT department and is running bandwidth-intensive, time-sensitive applications and technologies such as video conferencing or VoIP, then vendors like Exinda should be higher on their list then some of the others. This is not to say that the vendors mentioned above are the best solutions for the usage scenarios that I described, it is only to say that these solutions are more effective (from both business and technology perspectives) in certain use cases.