Mar 19, 2009 1:10 PM,

WAN optimization services head down-market

By Ed Gubbins

Managed WAN optimization services are ripe for CLECs and SMBs, analysts say

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Sprint sells WAN optimization in part as a way for customers to, for example, eliminate email spam in the cloud rather than at the desktop so that spam doesn’t consume bandwidth travelling all the way to the desktop. It can also free up WAN bandwidth by eliminating traffic that shouldn’t be there – like that generated by employees watching Hulu videos when they should be working, for example. In a sense, the new service is an evolution of Sprint’s existing NetCache content-filtering offerings.

And security is often tied in to WAN optimization offerings. BlueCoat has a particular emphasis on security, and its chief rival, Riverbed, recently acquired a company with a historical focus on security: Mazu Networks.

“We’re increasingly seeing that our managed service provider partners and the market at large see [security and application acceleration] coming together,” said Jeff Bernard, director of service provider marketing at BlueCoat, adding that managed services represent about 15% to 20% of the company’s business.

“Security is becoming a feature of the WAN,” said Steve Parrott, Sprint’s portfolio manager.

In some cases, security is the foot in the door, and in some cases, it’s an upsell. For example, Orange Business Services uses Bluecoat gear to offer application performance analysis services, but the visibility into customer networks yielded by that service helps Orange sell security services as well, Bernard said. “They use it to troubleshoot issues and ensure network [service level agreements], but they also use it as a tool to understand what’s going on in the network and to upsell things like security or acceleration. So if they detect a problem, they can say, ‘Hey, you could insert security here to solve this problem.’”

The sophistication and breadth of these offerings may grow as the vendors do. Riverbed and BlueCoat have been growing through acquisition, challenging Cisco Systems and Juniper Networks, which entered the space through its half-billion-dollar acquisition of Peribit Networks in 2005.