WANop market rocket

WANop Bounces Back and Blasts Off

WANop market rocketThe year started off with a resounding thud for the WAN optimization market, with a 20% falloff in sales in the first quarter. While that big a drop was a surprise to Sam Barnett, directing analyst for data center and cloud at Infonetics Research, he said his company had been predicting that WANop, especially for hardware appliances, was largely saturated, for the last three quarters.

With the second quarter numbers for the data center network equipment vendor market share just announced, it looks like WANop is back with a vengeance. The report, which tracks data center Ethernet switches, application delivery controllers (ADCs), and WAN optimization appliances, showed that the WAN optimization segment bounced back nicely from its train wreck in the first quarter to double-digit growth. WAN optimization revenue rose 12% sequentially in 2Q12, but is flat year-over-year.

While that’s good news for WANop vendors, Barnett cautioned that market saturation will hamper any meaningful long-term growth in this space, driving the major players to eye adjacent markets for new revenue opportunities within established and loyal account bases. His other qualifier is that the somewhat bleaker outlook is primarily for the branch-office segment, which accounts for the lion’s share of the market. The data-center to data-center prospects look a lot brighter, he said.

The news was also mixed for application delivery controllers (ADCs), with growth slowing to 3% from the previous quarter, and just 13% year-over-year. Infonetics expects virtual solutions to open the door for the penetration of ADC technology into small- and medium-sized businesses-an area that historically has not been targeted by the leading vendors in this space.

Dell’Oro Group provided a more optimistic view, predicting that the ADC market will exceed $2 billion in 2016, driven primarily by data center virtualization and virtual appliance deployments. “Within the Application Delivery Controller market, we see increasing strength in virtual appliances and expect this growth to continue throughout our forecast horizon,“ said Casey Quillin, Senior Analyst of Data Center Appliance Market Research at Dell’Oro Group. “Virtual appliances can quickly be deployed in production networks as unexpected or unplanned needs arise, such as supplementing existing hardware with a virtual appliance for peak load or surge situations.”

The virtual WAN optimization market appears to be growing strongly. In April, Silver Peak announced its Virtual WAN Optimization Marketplace had exceeded 10,000 downloads after just two months of operation.

“The WAN optimization market is undergoing a fundamental transformation,” said Larry Cormier, senior vice president of worldwide marketing for Silver Peak. “The market has changed from a ‘branch office-in’ to a ‘data center-out’ perspective, and virtualization of data-center-class WAN optimization is the key technology for enabling scalable, high performance, cloud-ready networks across the enterprise. The dramatic rate at which our marketplace has reached 10,000 downloads is proof that Virtual WANop, with its compelling cost/performance ratio, is truly a disruptive market force.”

With network traffic spiraling out of control and the virtualize-everything movement gathering momentum, virtual WANop just makes sense.

Image source: flickr (jurvetson)

About the author
Steve Wexler
Steve is a proficient IT journalist, editor, publisher, and marketing communications professional. For the past two-plus decades, he has worked for the world’s leading high-technology publishers. Currently a contributor to Network Computing, Steve has served as editor and reporter for the Canadian affiliates of IDG and CMP, as well as Ziff Davis and UBM in the U.S. His strong knowledge of computers and networking technology complement his understanding of what’s important to the builders, sellers and buyers of IT products and services.