Worldwide Application Acceleration Market Reached $344 Million in First Quarter of 2006

Gartner: The worldwide application acceleration market totaled $344 million in the first quarter of 2006, a 21 percent increase from the first quarter of 2005. The market is on pace to surpass $1.5 billion in 2006, a 23 percent increase from 2005. Branch office server centralization projects and the move to Web browser-based applications continue to drive this market. While the overall market was flat, the first quarter of 2006 represented a period during which strong players with functionally rich products like F5 Networks, Citrix NetScaler, and Riverbed took share from weaker competitors. 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). 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. In the first quarter of 2006, the ADC market reached $209 million. F5 expanded its lead over Cisco, garnering 33.9 percent of the overall ADC market, while Cisco accounted for 26.6 percent of the market. Rather than slowing F5's growth, Cisco's long-anticipated Application Control Engine announcement slowed sales of its own products. Buoyed by a strong product and channel, Citrix moved into the third position with a market share of 7.4 percent, followed by Nortel and Radware, with market share of 6.1 and 5.9 percent, respectively. As companies become dependent upon browser-based applications, Advanced Platform ADCs become strategic data center infrastructure. F5 continues to expand its lead in this key segment by combining the richest suite of functions, including application security, with strong partnerships with application vendors. 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. Worldwide WOC revenue totaled $135 million in the first quarter of 2006. Packeteer remained the leader, with 18.7 percent of the market, followed by NetApp, Stratacache and Riverbed. Riverbed demonstrated the largest market share gain in the quarter,. Riverbed's performance shows the trend toward multifunction products that provide advanced protocol optimizations. Juniper's lackluster performance of its WX products is a sign that the company's channel and sales problems are not resolved.

Worldwide Application Acceleration Market Publ 20060608