WAN acceleration market to double: Infonetics

As companies open more offices overseas, consolidate data centres and more employees work from home, wide-area network optimization products will become more popular among IT departments, according to an analyst with Infonetics Inc.

The Campbell, Calif.-based firm this week released two reports on network equipment.

In one report, titled Enterprise Routers and WAN Optimization Appliances, Infonetics said network equipment makers shipped 100,000 optimization appliances last year, and predicts that number will double by 2010.

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WAN optimization products work by using caching and compression and tweaking network protocols to reduce the time it takes for server-based applications to respond to queries.

“The idea is to speed up applications as they traverse the wide area network,” said Matthias Machowinski, Infonetics’ directing analyst for enterprise voice and data. The market leader is San Francisco-based Riverbed Networks Inc., which makes the Steelhead appliances. Riverbed last year made about 25 per cent of total revenues in the WAN optimization market.

Two other vendors – San Jose, Calif.-based Cisco Systems Inc. and Blue Coat Systems Inc. of Sunnyvale, Calif. – each earned 20 per cent of total market revenue.

Blue Coat’s product line includes the Proxy SG and Proxy AV appliances. Infonetics said Cisco’s recent introduction of its ASR 1000 router “injected some excitement” into the market.

Machowinski said companies will buy WAN optimization gear because many are consolidating data centres in central locations.

“If you look at how geographically distributed a company is today, there’s a very good chance that you’re going to be accessing applications over a wide-area network,” he said.

Another major trend in networking is the use of Gigabit Ethernet to the desktop.

In its Ethernet and Applications Switches report, also released this week, Infonetics reported revenues for Layer 3 switches grew 35 per cent last year, driven in part by shipments of Gigabit and 10 Gigabit switches.

“We can debate whether (gigabit to the desktop) is 100 per cent necessary today,” Machowinski said. “Many people will say it’s not unless you’re an extreme power user or something like that. The key issue here for a lot of these companies is the equipment will sit on the network for a number of years and the larger the company is, the more forward-looking they are in their planning. They don’t know what kind of bandwidth needs they’ll have five years down the road.”

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