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Carriers Flocking to Managed WAN Acceleration

Looking for faster WAN and SaaS access? The solution may well come from a WAN optimization solution. Don’t worry if you can't lay out all the cash now, Carriers are aligning themselves with equipment vendors to offer WAN acceleration as a managed service which could lower capital expenditure costs for enterprises.

WAN optimization technologies from vendors like Cisco, Riverbed, Juniper, Blue Coat and others offer the promise of reduced latency and overall better bandwidth utilization for applications. As enterprises continue to seek out ways to do more with less, WAN optimization is a market that is projected to reach $1.2 billion in revenues by 2010.

"Certainly in today's market with the financial conditions we're experiencing, most people would support the idea that a large contingency of the end user community are looking for alternatives to large scale capital expenditures," Randy Schirman, Riverbed's VP of service provider business, told InternetNews.com.

Another key reason, why managed services are perceived to be attractive is a growing resource skills gap at enterprises as companies continue to downsize staffing.

"If they [enterprises] don’t have the necessary people, processes and tools needed to manage the systems on an ongoing basis, it can often be cheaper to engage a managed service provider (MSP) rather than build these capabilities themselves," Will Scott Cisco's director of service provider marketing, managed business solutions told InternetNews.com. "In addition, from a cost perspective, managed services often include the underlying technology, processes and people as part of a predictable, monthly recurring charge – allowing the end user to adopt and consume the wide area network (WAN) acceleration technology as OPEX rather than CAPEX."

Filling a global need

Service providers like NTT, Verizon, AT&T, BT, Telestra and Telus are now offering Managed WAN optimization services that include hardware from network equipment vendors. In the case of NTT America they use equipment from both Riverbed and Cisco to offer to customers. The reason why carriers like NTT offer managed services is simple, it's something else that global enterprises need and will pay for.

"Compared to an in-country network, in global applications longer latency affects application performance and throughput issues are sometimes attributable to latency, not the bandwidth," Stephen Bloom VP for business development at NTT America's Arcstar Business Unit told InternetNews.com. "It is always important to design network and bandwidth to fit customers’ business requirements. Having the Managed WPA (WAN Performance Accelerator) enables us as a global network provider to offer enterprise customers an optimization of the global network."

Bloom argued that by going the managed service route for WAN optimization, enterprises get one stop Global WAN operation including acceleration devices. At the core though, it is continuing demand for more bandwidth and greater operational efficiency that is driving the need for WAN optimization technologies, managed or not.

"First of all, the size of data or file exchange in business has continuously grown in the past few years," said Bloom. "The most significant change is that as a result of consolidation and centralization of services worldwide, the traffic that goes through customers’ global WAN dramatically increased. The overall increase in communication traffic that goes through global WAN expands the market."

Next page: Add Web 2.0 and SaaS to the mix