Alcatel-Lucent’s VPN Optimization in the Cloud

Enterprise WAN acceleration and optimization is often thought of as effort that requires hardware appliances in the enterprise. A new effort from Alcatel-Lucent (NYSE: ALU) aims to change that perception by offering optimization in the cloud — without the need for a large-scale on-premises deployment.

Alcatel-Lucent’s new Application-Assured VPN offering puts application optimization capabilities inside of a service provider’s infrastructure, enabling them to deliver optimization in the cloud.

That’s in contrast to the typical manner in which enterprise WAN optimization occurs today: by way of a hardware appliance that site within an enterprise infrastructure. There are numerous vendors in the WAN optimization and acceleration space, including Blue Coat, Cisco, Citrix, and Riverbed, which all have customer-premises equipment to enable the optimization.

“From an enterprise perspective, this is an attractive alternative to an overlay architecture,” Manish Gulyani, senior director business services marketing and strategy at Alcatel-Lucent, “This solution gives enterprises the means to monitor and control applications without the need to deploy boxes within their location. From our perspective, this is a win-win for the enterprise and for the service provider to offer this solution to their enterprise customers.”

If all goes well, the new service could potentially represent a new competitive solution in the WAN optimization market, which was worth $1 billion in 2008.

From a technical point of view, the offering works using a new services card that plugs into the company’s 7450 Ethernet Service Switch and 7750 Service Router products. Gulyani also said the new optimization service will fit ranges from 20 Gbps to 1 Tbps in scale, and the systems are widely deployed across Alcatel-Lucent’s customer base.

Gulyani explained that what the card does is it provides deep packet inspection to monitor and control enterprise VPN traffic on a per-application basis. It also offers reporting and analysis that provides enterprise users with a Web-based dashboard that can show usage patterns and enable better resource management.

“The enterprise maintains full control and has full visibility into their VPN even though the monitoring is happening within the carrier’s network,” Gulyani said. “The deployment at the enterprise side is fairly simple.”

There is, however, at least one key difference between what Alcatel-Lucent is offering and what the other vendors are currently doing — namely, specific application-acceleration capabilities for enterprise software like Oracle, SAP or even Microsoft Outlook.

Gulyani said that the controls offered through Alcatel-Lucent’s solution focus on giving access controls for application priority as well as bandwidth allocation.

“The initial focus is on prioritization and bandwidth control,” Gulyani said. “We’ll be offering specific application acceleration techniques at a later point.”

The idea of running WAN optimization as a managed service, albeit with customer-premises equipment, is one that carriers including NTT, Verizon, AT&T, BT, Telestra and Telus are already embracing.

For Alcatel-Lucent, Gulyani noted that the new Application-Assured VPN offering could be used by carriers to deliver better cloud-based services by offering a higher quality of service and manageability.

He added that carriers are looking where they can offer video conferencing on demand and they need solutions that can effectively control and manage application performance. Gulyani sees the new solution as a way for carriers to add incremental revenues on top of their existing network infrastructures.

“From our point of view, we are creating this solution to further differentiate our platform and to help carriers differentiate their services,” Gulyani said.

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