Ipanema Technologies: A True Synergy Between WAN Optimization and Application Performance Management
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1 Ipanema Technologies: A True Synergy Between WAN Optimization and Application Performance Management Introduction When WAN optimization technologies were first introduced to the market, solution providers were looking to differentiate from each other mostly based on how fast they could move the data across the WAN and how much they could save for end-users in cost of bandwidth. However, as the complexity of network traffic increased, technology vendors had to provide more than just pure acceleration, data reduction, or basic bandwidth management capabilities. As a result, the ability to fully manage performance of applications delivered over the WAN is now becoming the key point of differentiation among vendors. This report from TRAC Research examines technology capabilities and strategies of Ipanema Technologies and their alignment with key trends in the WAN optimization market. Trends in the Market The key value proposition of WAN optimization vendors used to be pretty simple: faster delivery of business-critical data at optimal cost of bandwidth services. This proposition made it fairly easy for endusers to realize a return-on-investment from this type of solution, and WAN optimization became one of the fastest growing IT performance technologies. Some two or three years ago the term, WAN optimization, was so popular among end-users that it became a part of marketing messaging for companies that were not even providing traditional WAN optimization capabilities (e.g., providers of load balancing, file transfer, or even content delivery networks solutions). These days, even vendors that were pioneers of the WAN optimization market are not too happy to be associated with this term. Does that mean that this market is declining? No. Actually, the need for this type of technology is steadily growing, but the requirements that end-user organizations are presenting to WAN optimization vendors are changing. These new requirements are driving vendors to offer a full suite of solutions for managing application performance over the WAN as opposed to just helping end-user organizations to get more data through their pipes faster. That means that, in addition to tools for application acceleration and Quality-of-Service (QoS), WAN optimization vendors are being asked to provide a mix of capabilities that would allow organizations to identify, prevent, and resolve application performance issues. Some of the competencies that can help organizations deal with these issues include the ability to identify parts of the infrastructure that are causing performance issues, the ability to define performance baselines and have alerting capabilities when the performance falls under defined thresholds, as well as the ability to monitor response times June 2010
2 for each application and the amount of resources (both server and network) that are being consumed per application, network location, or user group. Additionally, technologies such as virtualization and cloud computing are changing not only how organizations are hosting their computing resources, but also how they go about managing performance of IT services. Deployments of public cloud computing services are increasing the amount of business critical data that organizations are accessing over the public Internet, as opposed to over the WAN, which changes policies that organizations need to have on the network side to make sure that the network doesn t become the bottleneck for delivery of these services. At the same time, very few organizations are looking to host all of their IT services in the cloud, which creates new hybrid environments where organizations are accessing some of their services over the public Internet while other services are being accessed through private WAN. Managing these types of environments creates new management challenges for end-users, and WAN optimization technologies could be one of the key enablers for addressing these challenges. Also, proliferation of desktop virtualization technologies changes the dynamic of managing WAN traffic. Since virtual desktop traffic is highly interactive and challenging to monitor, many organizations are finding that QoS tools that they already have in place are not as effective in environments that have virtual desktop infrastructure (VDI) in use. Another interesting trend in the WAN optimization market is a change in how these solutions are being delivered. Organizations are becoming increasingly interested in having more flexibility and lower management cost when using this type of technology, and technology vendors and service providers are making adjustments to their offerings to accommodate this requirement. Technologies for managing application performance over the WAN are becoming an integral part of strategies of telecommunications carriers, and more organizations are becoming interested in deploying this technology as a managed service. Additionally, WAN optimization vendors are increasingly offering their solutions as a software client or a virtual appliance. This changes not only how organizations are deploying these solutions, but also impacts the pricing models and the management cost of implementing WAN optimization solutions. Overview of Ipanema Technologies Ipanema Technologies has been well known for robust network and application visibility capabilities combined with QoS and control. Also, the company s key technology differentiators over the competition have been a single platform for acceleration, control and monitoring of WAN traffic, centrally managed multi-tenant platform for service providers, and an automated approach for traffic management. Ipanema s solutions are best suited for large enterprise and service providers, and the company is serving some of the leading telecom carriers in Europe such as British Telecom, Orange Business Services, Cable and Wireless, T-Systems, Telecom Italia, Swisscom, and others. The company was also able to expand its leadership position in the European service provider market to Asia, and it is now working with service providers such as Tata Communications and Reliance and entering the Japanese enterprise market with KDDI. Page 2
3 The core of Ipanema s offerings is WAN Governance, a management concept that incorporates a unique combination of integrated technology capabilities, such as advanced control and prioritization of network traffic, visibility into network and application performance, and application acceleration, as well as management functionalities such as automating processes for assigning IT resources from global and business perspectives. The company deserves credit for its vision of the market and designing some capabilities a while before they became a must have for many users. Back in 2007, Ipanema s key messages were that organizations will need more than just acceleration and basic QoS capabilities to manage application performance over the WAN and that users or managed services will be asking for SLAs related to application performance and not only network related SLAs, such as network uptime and mean time to repair network performance issues. The importance of application SLAs and capabilities for managing application performance over the WAN is increasing for end-users, and Ipanema is well positioned to address these needs. Ipanema s sales strategy is also significantly different than that of other WAN optimization vendors. The company is taking a solution selling approach through integrators and telecom carriers, and their average deal size is more than five times higher than that of the majority of other WAN optimization vendors, while the length of their average sales cycle is significantly longer than that of other WAN optimization vendors. Even though Ipanema is often put in the same technology bucket with other vendors and has its capabilities compared to all of them, the fact is that the company truly competes with only a few of these companies. Due to its go-to-market focus and the range of capabilities that it is offering the company almost never directly competes with some traditional WAN optimization vendors such as Juniper Networks, Blue Coat, or Exinda. Ipanema s top competitors are Riverbed and Cisco WAAS, while the company also competes with Streamcore, mostly in the French market, and Expand Networks in the large enterprise market. Strengths and Opportunities Even though there are a number of WAN optimization vendors that can provide capabilities for QoS, application acceleration, and network and application performance monitoring, Ipanema is one of a few vendors that can provide all of these capabilities through a single platform. This saves organizations time and resources that would be spent on integrating different tools sets to address each of these areas and allows them to provide a closed loop between visibility, QoS, and acceleration features as well as a high level of automation. Also, the fact that all of these capabilities are provided through a single platform has enabled the company to put a set of management policies in place that turn their offerings into more than just a set of integrated WAN optimization functionalities and provide a management solution that goes well beyond traditional WAN optimization offerings. In January of 2009, Riverbed acquired Mazu Networks to add capabilities for network and application visibility to its WAN acceleration offerings. Even though Riverbed had some integration with Mazu products prior to the acquisition, all the capabilities of these two offerings still haven t been integrated onto a single Page 3
4 platform, and Riverbed is still selling Mazu s (now Riverbed Cascade) products as a separate offering from its WAN optimization gear. Additionally, Ipanema s recently launched Hybrid Network Unification solution is well positioned to help organizations that are using a combination of the traditional WAN and public Internet to access business-critical services. This solution is designed as a set of application-aware, intelligent network policies that allows organizations to find a path for accessing the data using hybrid networks at optimal cost, performance, and alignment with business needs in an automated fashion. As organizations move their IT resources to the cloud and look to better manage redundant ISP connectivity, this becomes a very important capability, and it should strengthen Ipanema s position in the market. Proliferation of WAN optimization and application performance management services provided by telecommunications carriers is another major opportunity for Ipanema. In the past, WAN optimization as a managed service had been getting more traction from end-users in Europe than in North America, but that trend is changing as US-based carriers such as Verizon Business, AT&T, and Global Crossing have developed a robust set of service offerings built around some of the leading hardware and software products. Furthermore, users are increasingly asking their carriers for SLAs related to application performance and capabilities for having full visibility into performance of the network and applications. This trend aligns with some of the core strengths of Ipanema s technology, and it should create some new opportunities for the company to build on its current leadership position in the European service provider market and create new growth opportunities globally. Moreover, as organizations are seeking more capabilities for true application performance management from their WAN optimization solutions, Ipanema s capabilities for automating processes for assigning optimal amounts of resources to IT services based on their importance to the business could be another important competitive differentiator. Whereas other QoS solutions depend on IT staff to define classes of service and adjust these classifications to changes in usage patterns, resource utilization, and performance levels, Ipanema was able to automate this process and through the process of active learning add more intelligence to managing the network. Ipanema s QoS capabilities are effective in assigning and enforcing usage policies to interactive network traffic. This capability becomes especially important in VDI environments and presents another growth opportunity as more organizations are becoming interested in virtualizing their desktops. The feature is also very useful for organizations that are intent on managing the delivery of Voice-over-IP (VoIP) and video traffic over the WAN. Many vendors focused on monitoring network and application performance are finding that the ability to seamlessly integrate with leading WAN optimization solutions can create new opportunities for them, as it makes them more appealing to organizations that are either using or evaluating these solutions. For example, strong integration with Cisco WAAS solutions significantly contributed to the success that NetQoS experienced prior to being acquired by CA Technologies. InfoVista, Fluke Page 4
5 Networks, and Network Instruments are also hoping to take advantage of the same opportunity. Additionally, vendors such as OPNET and NetScout are now seeing new opportunities through providing visibility into environments where Juniper, Riverbed, and Cisco solutions are deployed. Since Ipanema is already providing WAN optimization and network and application monitoring, their users do not have to worry about how well their WAN optimization solution is integrated with their monitoring tool and vice versa. That eliminates some of the key concerns that end-users have about deploying WAN optimization solutions and should make Ipanema even more appealing to end-user organizations. Challenges It should be noted that the majority of Ipanema s revenues are currently being derived from the European market, and they have only had limited success in translating these wins to enterprise and service providers in North America. Even though Ipanema s capabilities would benefit service providers in North America, the company has been fighting an uphill battle, as one of the key selection criteria for the majority of Tier 1 telecom carriers in US is brand recognition and market awareness of the WAN optimization solutions around which they are building their services. Ipanema s brand recognition in North America is not as strong as it is in Europe, however, and winning the business of some of the major telecom carriers in North America might be a challenge. However, the company was able to leverage a global presence of some of their service provider partners (e.g., British Telecom, Orange, etc.) and sign up a number of large US enterprises through this channel. Also, Ipanema recently doubled the number of their sales representatives in North America, which shows the company s commitment to increasing its presence in this market. Ipanema s range of capabilities is very robust and includes anything from Layer 7 prioritization of network traffic, TCP acceleration, data compression and caching to very sophisticated capabilities for monitoring application performance, such as their own index for measuring application performance from the end-users perspective. Even though it is impressive that this wide range of capabilities can be delivered through the same platform, this can also turn into a challenge as some organizations already have these capabilities provided by point solutions, and it is difficult for them to cost justify investments in a technology that provides competencies that they already have. As many WAN optimization vendors are now delivering their solutions as a virtual appliance or a software client, Ipanema has still yet to add this type of capability to their offerings. These delivery methods resonate especially well with organizations that have smaller branch offices and cannot cost justify having a hardware solution at each office. As more organizations move virtualization technologies out of labs and into production environments, they are more likely to be interested in virtual solutions for managing application performance over the WAN. Lack of this capability could decrease the size of the addressable market for Ipanema. While Ipanema is currently offering some of the key acceleration techniques, the company s portfolio still lacks some major acceleration capabilities, such as SSL acceleration. Even though application Page 5
6 acceleration techniques do not constitute a core strength of Ipanema s offerings, lack of capabilities for accelerating SSL encrypted applications could cause some end-users to not include the company on their short-lists for future purchases. However, Ipanema deserves credit for the work that they have done recently on enhancing their application acceleration capabilities. The company is now providing strong capabilities for Common Internet File System (CIFS) and is taking an innovative approach towards TCP acceleration that only requires acceleration hardware on the server side. It also takes a unified approach for delivering all acceleration capabilities (compression, caching, TCP acceleration, etc.) which is different from that of some other solutions that deliver each of these techniques individually. Summary Changes in the ways in which organizations host, access, and manage their IT services are making a significant impact on the vendor landscape of the IT service delivery market. While some vendors are working on adding new capabilities to their portfolios to address new problems that end-users are experiencing, others that already have these capabilities are more worried about how to package them together so they will resonate well with end-users from both operational and business perspectives. Ipanema is one of those vendors that should be pleased that the market is finally coming to them as organizations are increasingly becoming interested in capabilities that were part of their offerings when their technology was designed. However, not all organizations have the same needs or strategies for managing performance of applications over the WAN. Some organizations are still mostly concerned about improvements in network throughput and application response times, and companies like Ipanema are probably not the best fit for them as they can get more advanced acceleration capabilities from vendors like Riverbed or Cisco WAAS. Organizations that would get the most out of a solution like the one Ipanema provides are those that are endeavoring to deploy not just acceleration or QoS or monitoring, but a fully integrated management platform for managing the delivery of IT services over the network. Authors: Bojan Simic, Principal Analyst Tom Karol, Research Editor TRAC Research is a business-to-business (B2B) market research and analyst company that specializes in IT performance management. The company s research approach is based on four key attributes of true market research: Trusted, Relevant, Actionable and Credible. Our mission is to facilitate open conversations between technology vendors and end-users centered around unbiased, primary market research. Areas of coverage include: managing application performance over the WAN, application performance monitoring, Business Service Management (BSM), network monitoring, end-user experience monitoring, application delivery, managed network services, virtualization management, Cloud management and data center management. For more information about TRAC Research visit Page 6
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