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.

An upcoming report from TRAC Research will get into vendors’ strengths and weaknesses in different usage scenarios in more detail. The point here is that WAN Optimization technology plays a very important role in enabling some of the key IT initiatives (desktop and server virtualization, data center consolidation, disaster recovery, cloud computing, etc.), but not all WAN Optimization solutions are as effective in supporting each of these projects. More importantly, end-users are realizing that there is no clear market leader in the WAN Optimization market, but that there are vendors that have strengths in supporting their specific IT initiatives.

Each of the WAN Optimization vendors has its strengths in some of these sub-markets and some of them have already capitalized on their ability to “pick their fights” and go only after market segments where they have the best chance to win. The prime example is Expand Networks who, over the last 12 months, was able to significantly increase their customer base by focusing on end-user organizations that are conducting VDI, server consolidation and server-based computing projects or are using satellite technologies to deliver business-critical data (although acquiring a new technology and turning a technology that they acquired into a truly innovative product didn’t hurt their position either).

New IT initiatives and technologies are driving a new demand for WAN Optimization solutions, but they are also increasing the complexity of managing performance of applications that are being delivered over the WAN. As a result, a WAN optimization solution no longer means QoS and acceleration only. Ability to ensure optimal speed and availability of applications over the WAN increasingly depends on visibility capabilities that traditional WAN Optimization capabilities (i.e. TCP acceleration, compression, caching, SSL offload, QoS, etc.) need to be coupled with. This market recently saw two major acquisitions (Blue Coat-Packeteer and Riverbed-Mazu Networks) that were centered around improving visibility capabilities. On the other hand, Ipanema Technologies, who was traditionally known for their QoS and visibility capabilities, recently added new acceleration features to their product portfolio.

As nearly all major WAN Optimization vendors are moving into the direction of providing acceleration, visibility and QoS on the same platform, a differentiation in this market will be based less on capabilities of technology solutions and more on how well aligned these capabilities are to IT projects and business services that they are supporting.

The days when companies like Perbit Networks, Tacit and Swan Labs were trying to educate the market about the benefits of reducing and prioritizing WAN traffic are long gone.  WAN Optimization became of one the hottest technologies for enabling IT services and this market is positioned to support some of the key business strategies (expanding geographical presence, acquiring the best talent worldwide, etc.) and IT initiatives (rollouts of new applications, cloud computing, SaaS, virtualization, video). However, it is not very likely that this market will continue to grow as a whole, but as a part of major technologies and IT initiatives that it is enabling.

If you are an end-user that is looking to deploy or upgrade a WAN optimization solution, you should NOT be looking to find out who are the leading 2-3 vendors in this market. Instead, you should find out what vendor(s) can do the best job in supporting your specific applications, technologies and network topology.