Now that we have officially closed the books on 2005, we are going to use the first two WAN newsletters of the New Year to look forward to what we might expect in 2006.We predict that the major service providers will spend 2006 working on finalizing all of the organizational issues associated with the mergers and acquisitions they announced in 2005. This means that a lot of their energies will be spent trying to decide who works for whom, and where the real power resides in the new organizations.The service providers will also have to figure out how they will coordinate the disparate plans that they each have to bring new services, such as Layer 2 MPLS-based services, to market. Since we have never seen organizational upheaval of this magnitude actually make a company more nimble, we are expecting a quiet year from the service providers.We heard a lot about the benefits of server consolidation in 2005, including reducing cost and enabling IT organizations to better comply with myriad regulations such as Sarbanes-Oxley.While these benefits are compelling, we also heard horror stories about how some applications, most notably Microsoft applications, don\u2019t run well once the servers have been centralized and need Wide Area File Services. However, more recently we have begun to read stories that say that Microsoft\u2019s new operating system (called R2) fixes most, if not all, of these problems. 2006 will be a good year to cut through these contradictory claims and determine if this is indeed a situation you need to worry about.If possible, in 2006 there will be even more emphasis on ensuring application performance over the WAN than there was in 2005. We believe this because a company\u2019s business unit managers care far more about applications than they do about IT infrastructure. Since these are the people that either set or heavily influence the IT budget, they tend to get their way. In 2005 a number of vendors in this area acquired other companies in an attempt to build up a broad product base and to better compete. At the same time, new companies continue to get\u00a0venture capital\u00a0funding and bring products to market. We expect both of these trends to continue into 2006.The next WAN newsletter will continue our look into 2006 and will focus on Web services and MPLS.