worldwide Application Acceleration Market Will Reach $3.7 Billion in 2008

Gartner: Global. As companies roll out browser-based applications and centralize servers, the market for application acceleration products will continue to grow. Sales of these products are expected to reach $1.8 billion in 2006, a 37 percent increase over 2005. In 2007, the market is expected to reach $2.9 billion in end user sales (see Table 1).

Application acceleration appliances enable server/data center consolidation and deployment of browser-based application interfaces while lowering total cost of ownership. The market comprises two segments: application delivery controllers (ADCs) and WAN optimization controllers (WOCs).

The ADC segment is propelling the growth in the overall application acceleration market as ADCs will be deployed between the Web server and application/services tier, in addition to being deployed in front of the Web tier. The WOC segment will undergo a major shift during the next few years as remote WOC functions are absorbed into the branch office box (BoB). The development of BoB is being driven by increased demand for services at branch level.

Table 1 worldwide Application Acceleration Market End User Sales, 2005-2009 (Millions of Dollars)

	2005	2006	2007	2008	2009
Total End User Sales	1,349.5	1,847.5	2,899.7	3,714.4	3,530.9

Source: Gartner (August 2006)

Consolidation of servers due to virtualization and multicore CPUs will slow growth in ADCs in the beginning of 2007. However, overall demand will continue to grow as richer features are deployed in ADCs. Sales of ADCs are expected to reach $1.1 billion in 2006, a 24 percent increase over 2005. In 2007, the market is expected to reach $1.8 billion in end user sales

The WOC market will continue to perform well through 2008, however end user sales are expected to decline 12.6 percent in 2009 largely due to the shift to lower-priced small branch office boxes and competitive price pressure enabled by lower manufacturer’s costs.

Additional information is available in the Gartner Dataquest report Forecast: Application Acceleration Equipment, worldwide, 2005-2010Publ 200608212