Network managers faced with the challenge of cutting costs while still improving application performance are turning to WAN optimization tools from vendors such as Cisco and Packeteer.

In a report issued last month, IDC Senior Analyst Stephen Elliot detailed the pressures WAN managers face and how vendors try to address them with compression, quality-of-service and application monitoring tools. IDC estimates the market for WAN optimization management products will grow from $236 million this year to $427 million by 2008. These products promise to speed applications across WANs without requiring network managers to upgrade bandwidth.

IDC defines WAN optimization products as hardware and software that compress data streams, monitor traffic flows, prioritize traffic via QoS, and manage applications from a protocol perspective. Vendors such as Allot Communications, Expand Networks, Network Physics, Peribit Networks and Packeteer offer products that perform optimization with hardware and/or software.

Elliot says that while Packeteer currently leads this market, the company and its PacketShaper appliances will face competition from hardware vendors, most notably Cisco with its NetFlow-based application products.

"[Vendors should] recognize that compression will increasingly be a starting point for savvy users looking for better QoS control, more network security visibility and protocol analysis, and application management," Elliot wrote in the report.

Elliot also wrote in the report that vendors should quickly develop or acquire compression technology and plan their ascension to the more advanced technologies users will be demanding in the future. The future of WAN optimization management includes technologies that will incorporate dynamic business policies, pattern-matching capabilities and protocol analysis with correlation and automated actions.

"Users are continuing to invest in new WAN optimization tools to reduce branch office bandwidth costs, improve or maintain application availability and… simplify IT infrastructure globally," he wrote.

Ann Bednarz is associate news editor at Network World.