Apps acceleration market in flux

A run on acquisitions of WAN/LAN acceleration vendors is causing confusion for those exploring the technology, which promises to speed key corporate applications, experts say.

But those with such gear already up and running have few complaints.

Just as this market's picture was becoming clearer, Juniper, Cisco and Citrix shook the Etch-A-Sketch. Juniper bought emerging application acceleration vendors RedLine and Peribit in April for a combined $469 million, while Cisco bought WAN traffic accelerator FineGround for $70 million. And in a move counter to the norm in the networking market, software vendor Citrix, which sells terminal server/thin-client hosting software, bought out NetScaler , a high-end Layer 4-7/application acceleration box maker, for $300 million.

When tallied up, the buyouts equal 86% of the 2004 application acceleration market.

Ties between hardware and software vendors also tightened more recently, as F5 last week announced a deal where Oracle will provide full support for customers accelerating Oracle databases on F5 gear. Additionally, Cisco launched an entirely new business unit around speeding up corporate apps through hardware - Application Oriented Networking - and partnered with IBM, SAP, Tibco and other software vendors in the effort.

One of the challenges of the application acceleration vendors has been defining exactly what their products plug into and what they do. Some, such as NetScaler and RedLine, offer devices that sit in front of banks of servers and provide multiple services, such as Layer 4-7 switching and load balancing, HTTP and non-Web-based traffic compression, as well as SSL VPN services and TCP/IP connection termination. Other gear, such as Peribit and FineGround devices, sit on both ends of a WAN link and optimize traffic for remote sites connected to a corporate data center - providing compression and security features.

According to Gartner, the market for these products came into its own last year when it reached $967 million worldwide. Acceleration gear, which sits only in a data center, accounted for more than half that amount, while WAN optimization products, which are deployed in both the data center and remote locations, made up the balance.

As customers install more of these products, and large networking vendors integrate the services into current gear, the various functions these devices provide - TCP/IP connection management, SSL offload, caching and compression - will be consolidated, experts say.

"Over time [these] functions will converge onto a single platform," says Joe Skorupa, principal analyst at Gartner. "The trend toward platforms that deliver four or more functions will accelerate as customers strive to simplify their infrastructure."

In the meantime, the spate of acquisitions in the market is causing confusion among potential buyers of application acceleration technology, some say. This could make it hard for vendors, especially some of the more established independent vendors still remaining, such as F5, Radware and Packeteer, to sell this technology.

"We have seen a lot of confusion with our customers, resellers and value-added distributors, as they sought to get a better understanding of the recent changes in the market," says Radware President and CEO Roy Zisapel. Earlier this month, the company warned it would miss Wall Street earnings expectations, attributing the rough times "primarily to the recent acquisition activity in the overall application-networking space."

Other recent reports by market analysts say there is huge potential in the market, but more intense competition since Juniper and Cisco entered the game. A recent report by investment research firm Piper Jaffry calls the acceleration market "one of the best-performing sectors within the networking universe'' but also said it would be rough going for vendors such as F5 until the dust settles.

Standard and Poor's Equity Research concurs, adding in a report that the Cisco, Juniper and Citrix deals "have disrupted the competitive environment through delaying customer buying decisions."

"We haven't heard of any confusion with our customers or potential customers," says Jason Needham, director of product management for F5. "I think the acquisitions in the market have shown that this technology is of high value to customers. More people are seeing the value of planning their network architecture with applications in mind."

Customers running acceleration gear up say the payback on such equipment is immediate.

Serono, a Switzerland-based biotech firm, has 5,000 employees, with more than a quarter of them working remotely in 50 sites across 40 countries. The firm last year installed devices from RedLine networks to front its key application servers, which deliver e-mail, Siebel CRM applications and other software via Web-based interfaces and portals.

The traffic compression the RedLine device provides has boosted response time of the company's Web-based applications while freeing up bandwidth over its WAN pipes, according to Rael Paster, head of collaboration services at Serono.

"We saw a 93% performance gain over our WAN links" after turning on traffic compression, Paster says.

Companies that have installed acceleration gear also praise the technology for its load-balancing and advanced features for handling IP addresses.

Devices from NetScaler were recently installed at ProHealthcare, a healthcare management company in Waukesha, Wis., with more than 5,000 employees. Instead of pushing applications out to remote users over the Web, ProHealthcare was moving its LAN and campuses-based patient management system, supplied by IDX, from green-screen terminal emulation to a browser-based interface.

The trick, says Cynthia Overby, manager of network services, was making the organization's high-end HP Himalaya mainframe act more like a Web server. When the application was switched from green-screen window on PCs to browsers, the Himalaya still handled the clients like terminal-emulated clients; the mainframe required a fixed IP address linking the PC and the server.

"This slowed down performance by about 30%" vs. the old green-screen application, Overby says. It also limited the number of connections to 2,456, which was the limit of IP-based clients the mainframe could handle. Putting a NetScaler box in front of the Himalaya allowed IP addresses to be dynamically distributed and eliminated cap on the number of client connections. The device also balanced the traffic load of IDX packets among the seven IDX server instances running on the mainframe, Overby says. Compression helps, too, shrinking the browser-based traffic, which has freed up LAN bandwidth by 25%. The NetScaler device also provides SSL traffic encryption, required by federal law for patient records. This has freed up CPU cycles on the Himalaya to process more IDX application bits. "All of this greatly improved the overall performance of the system," Overby says.

Buyout accelerationA series of acquisitions in the application acceleration market, which grew past $1 billion last year according to Gartner, has changed the market’s landscape.
CompanyTechnologyBought by Amount
PerabitWAN traffic accelerationJuniper (April)$337 million
RedlineWAN acceleration, load balancingJuniper (April)$132 million
FineGroundWAN accelerationCisco (May)$70 million
NetScalerLAN/WAN acceleration, load balancingCitrix (June)$300 million
Who's left
CrescendoLoad balancing, server processing offload
F5Load balancing, compression, traffic acceleration
PacketeerWAN traffic optimization
RadwareTraffic acceleration, load balancing

Learn more about this topic

Juniper buys Peribit, Redline to boost stake in enterprise market

04/26/05

Cisco snaps up bandwidth optimizer

05/30/05

Gaining speed, Citrix buys NetScaler

06/06/05

Q&A: Cisco's CTO on AON, data center future

06/23/05

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