WAN optimisation market continues 'downward trajectory'

But adjacent ADC space enjoys record 2014 despite recent Cisco exit

The application delivery controller (ADC) and WAN optimisation markets experienced contrasting fortunes in 2013, with the latter continuing its "downward trajectory".

According to analyst Infonetics Research, following a record 2012 the ADC market grew by another four per cent in 2013 to $1.75bn (£1.05bn) as enterprises continued to spend on technology to optimise their application environments. Revenue in Q4 was up by 10 per cent sequentially.

In contrast, the adjacent WAN optimisation market continued its downward spiral as revenue fell back eight per cent year on year in Q4.

Infonetics said Citrix has emerged as the main beneficiary of Cisco's decision to exit the ADC market in September 2012, having gained five points in market share from the move.

Although virtual appliances in the ADC sector are going "mainstream", accounting for 14 per cent of ADC revenue in Q4, Infonetics directing analyst Cliff Grossner said this would not be at the expense of hardware-based ADCs.

"Virtual application delivery controller (ADC) revenue is growing fast as cloud services, hybrid cloud, and the shift to cloud-architected datacentres create demand for virtual appliances," he said.

"Hardware-based ADCs aren't going away any time soon. They still provide the performance required by larger-scale deployments, and vendors are working to fold in other services such as security, application traffic monitoring, and predictive analytics. This will keep the market for hardware-based appliances healthy even as a portion of the ADC market turns to virtual appliances."

Although WAN optimisation revenue rose four per cent sequentially in Q4, the market remains on an "overall downward trajectory", Infonetics said, echoing the fears voiced recently by big investors such as Riverbed backer Elliott Associates over the sector's growth potential.

Infonetics said that vendors are adding mobility functionality to WAN optimisation products to drive new growth "while waiting for the cloud to have a positive impact".