Worldwide Application Acceleration Market Topped $1.2 Billion in 2005

Gartner: Displaces Cisco for Top Spot in Application Delivery Controller Segment . The trend to centralize servers and deploy Web-enabled intranet applications drove the worldwide application acceleration market to $1.2 billion in 2005, a 36 percent increase over 2004 vendor revenue. In 2004, worldwide vendor revenue was $915 million. Application acceleration appliances enable server/data center consolidation and deployment of browser-based application interfaces while lowering total cost of ownership. The market is made up of two segments: application delivery controllers (ADCs) and WAN optimization controllers (WOCs). The trend toward powerful platforms that deliver four or more functions continued as enterprises continued to simplify their infrastructure and vendors moved to grow revenue and increase account control. Market consolidation also continued in 2005 as strong platform players acquired promising software providers that had not yet reached critical mass in terms of distribution and revenue. ADCs reside in the data center, generally in front of front-line Web servers, are deployed asymmetrically (only at the data center end) and are deployed to improve the performance of browser-based applications. ADCs accelerate end-user performance of browser-based and related applications by providing a suite of services at the network and application layers. Buoyed by strong third and fourth quarters, F5 Networks took over the top spot in the overall ADC market in 2005 with 30.5 percent of the market. Cisco Systems slipped to the No.2 spot with a 29.3 percent market share. As the demand for more-capable, newer-generation products increases, F5's strength in the Advanced Platform ADC segment has continued to take share away from Cisco and smaller vendors in the market. Even as F5 continues to lead this rapidly expanding segment, the marketplace will be increasingly challenging for them as it now has to compete with much larger companies such as Citrix and Cisco. However, F5 Network's acquisition of Swan Labs, combined with a renewed focus on marketing, will allow it to compete on a broad basis in the enterprise. WOCs, designed for networks, are typically deployed symmetrically (in data center and remote locations) and improve the performance of applications that are accessed across a WAN. WOCs address application performance problems caused by bandwidth constraints and by latency and protocol limitations. Packeteer staged a strong recovery in 2005, taking the top spot in the worldwide WOC market with a 17.5 percent market share. Stratacache fell to second place with 16.5 percent of the market. Buoyed by a renewed focus on the NetCache product line, NetApp rebounded garnering 15.4 percent of the market. The WOC market will undergo a major shift during the next 12 months as vendors respond to customer plans to eliminate branch-office servers. The services required at branch level continue to expand rapidly to include streaming content, XML/Web services processing, WAFS, DHCP/DNS, advanced compression/caching ECDN and secure tunneling. The development of branch-office boxes (BOBs) has been driven by this increased demand for services at branch level.

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