As firms consolidate datacenters, the performance of the WAN connecting branch networks become a focus for network managers. Rather than having applications hosted and managed on site at each location or branch, centralizing all systems at one datacenter places a huge burden on the WAN.

According to Lo, this gives rise to two important results: firstly, investment in high-end and scalable networks at the datacenter, which drives a need for virtualization in networking, storage and server systems, and secondly, the increased adoption of WAN application delivery (WAD).

App-oriented network

WAD is a combination of WAN optimization and secure content/application delivery, noted Lo. As applications are being delivered across the WAN, enterprises must find ways to ensure the network is able to deliver services in a consistent and secure manner. Plus the adoption of IP telephony and other multimedia like video places an even greater emphasis on network optimization.

IDC predicts explosive growth in this segment in 2007 with more entrants to the market spurring even higher activity. Lo indicated that the WAN application delivery (WAD) segment will have a cumulative growth rate of 30 percent in the next 5 years.