How Global Crossing is offering WAN optimization

Global Crossing (NASDAQ:GLBC) has been offering WAN optimization as a managed service to select customers for about nine months, but the company officially launched the offering worldwide today.

WAN optimization uses a variety of means to reduce unnecessary bandwidth consumption in the wide area networks (WANs) of large enterprises, something that is particularly important for Global Crossing’s multinational customers, whose interoffice communications and file transfers often cross oceans and continents.

With customer-located equipment at the WAN end points, Global Crossing can ensure that, for example, the changing elements of IP video (e.g., the person talking) are transported over the network as needed while the unchanging background is transported only once. The technology uses deep-packet inspection to examine the traffic and look for patterns, substituting pattern codes for duplicate information. These sorts of waste-trimming actions can not only save bandwidth but improve the performance of applications by reducing latency.

Large enterprises have been using WAN optimization equipment from the likes of Riverbed Technology (NASDAQ:RVBD), BlueCoat Systems (NASDAQ:BCSI), Juniper Networks (NYSE:JNPR) and Cisco (NASDAQ:CSCO) for years. But interest in the technology as a managed service offered by carriers swelled last year as the harsh economy forced businesses to offload costs wherever they could.

“Most companies look at it this way,” said Dave Siegel, Global Crossing’s vice president of IP services management. “Rather than spending $2,000 per megabit per second on bandwidth, what if I spent $10,000 on a WAN optimization box? Or instead of buying the box, what if I paid Global Crossing $500 a month [for the service], which gets me $4,000 a month worth of bandwidth?”

Vendors in this space have reported that carrier adoption of their gear often results from enterprises outsourcing the management of their existing installed WAN optimization systems. Global Crossing’s customers, too, sometimes ask the carrier to manage certain preferred products, Siegel said. And the carrier is willing to do that on a limited ad hoc basis. But generally speaking, since the carrier is using Juniper gear for the new service, it will replace any existing gear from other vendors that its customers may already be using.
Global Crossing chose Juniper’s gear in large part because of its centralized reporting engine, which lets customers view online analyses of their traffic. Most other vendors don’t have that capability, Siegel said.

While Juniper’s gear might not be the most widely used in the WAN optimization market led by Riverbed, enterprise customers already typically ask Global Crossing to manage Juniper routers for them as a service, Siegel said – one to which WAN optimization can now be added for a fee.