Core Topic

Enterprise Networking Equipment: Communications Equipment

Key Issue

How will the enterprise communications equipment market evolve in the next five years?

Enterprises continue to expand their deployment of Web-enabled applications. It is difficult to imagine any class of enterprise application that eventually will not be Web-enabled. To reflect this trend, we have modified coverage and criteria of the Magic Quadrant from Web optimization to Web-enabled application delivery (see "Magic Quadrant Criteria: Web-Enabled Application Delivery").

The Magic Quadrant for Web-Enabled Application Delivery, 1H04 (see Figure 1) reflects these market changes and significant movement of the vendors, including some new vendors. During the past year, some vendors became stagnant, others improved significantly in vision or execution, and others expanded into adjacent markets. The key to success in the Web-enabled application delivery market is for vendors to continue driving innovation to help deliver a scalable, reliable and optimized application environment. With the rapid pace of innovation, vendors not keeping up with recent advances can quickly fall out of favor.

Vendors that appear in the Leaders quadrant have comprehensive product offerings for Web-enabled application delivery and related technologies. They also have demonstrated innovation, a strong commitment to the market and an ability to drive the market into new areas.

F5 Networks has a broad vision to provide a comprehensive IP data center architecture to include advanced application support, security and access. F5 has long been an innovator and leader in the market. During 2003, it provided enhancements for application security and access (two markets closely aligned with Web-enabled application delivery). In addition, F5 strengthened its deployment capabilities by expanding its Solution Center knowledge base. Although F5 has made numerous positive moves, it needs to focus more on application performance optimization. F5 lost some of its edge to more-nimble vendors during 2003. Enterprises should push F5 to demonstrate more specific application performance capabilities and to continue to enhance those functions. Compression is an obvious extension to F5's offerings, and we expect F5 to deliver compression in 1H04. Enhancements to XML optimization would also help F5 combat the emergence of focused vendors in this area. F5 improved its financial position during 2003 with a return to profitability and revenue growth.

Radware made significant inroads into the market during 2003. Revenue increased more than 25 percent year over year, and profits also increased. Radware expanded its sales and distribution capabilities during 2003, allowing the company to better meet the demand for its products. On the product front, Radware has made a strong push into two areas: 1) application security (with enhancements to its SynApps Architecture and the introduction of DefensePro) providing comprehensive attack signature filtering at wire speeds, and 2) route control. The introduction of LinkProof Branch is significant because it expands Radware's presence beyond the data center. Although the ability to control both ends of a Web-enabled connection only applies in enterprise architectures, it represents a significant advance in this market.

Vendors in the Visionaries quadrant have demonstrated innovation in key areas of the market. They also offer a broad product line (although not necessarily covering all areas). Enterprises considering a visionary vendor should ensure appropriate levels of local support and expertise.

Inkra Networks migrated from an initial service provider focus to one more clearly targeting the enterprise. The introduction of the Inkra 1500 Series Virtual Service Switch during 1H03 provides Inkra with a platform that is more in line with enterprise requirements. Inkra has developed a virtualized platform that allows fully isolated paths through the device. In addition, Inkra can provide comprehensive security and application delivery functions on a common platform. Inkra's latest software release included connection management features. Although Inkra does not have all of the application optimization features, it has exhibited a strong road map and an ability to move the 1500 Series platform forward. Enterprises requiring high levels of security and isolation between application environments should have Inkra on their shortlists of vendors.

NetScaler made significant strides forward during 2003. Most importantly, it improved its marketing messages, moving from targeting service providers to reaching the enterprise. Sales and distribution channels also showed major improvement. NetScaler has evolved from questionable market viability to a vendor that can deliver strong solutions to optimize enterprise applications. NetScaler continues to broaden its offerings and feature set by expanding its optimization and security capabilities. Enterprises should challenge NetScaler to provide reference accounts and demonstrate greater commitment to enterprise solutions.

Redline Networks demonstrated its vision by being the first vendor to target specific application optimization environments. In addition, Redline has added security and transaction assurance features to its feature set. Its OverDrive architecture provides the flexibility to add customized accelerators for different applications. Redline is attempting to expand its channels by partnering with other software and hardware vendors. Redline has also increased its visibility with some high-profile customer case studies that resonate with a large portion of the enterprise market. A solid vision of working with specific applications and enabling application service modules to support new applications has propelled Redline. For 2004, enterprises should press Redline for customer references that closely match their environments and to expand its customized application support.

Vendors in the Challengers quadrant are often larger vendors with varying presence in the market. They have access to significant resources for product development, sales, channels and support, but do not demonstrate enough innovation in new market areas. Before making quick purchase decisions, enterprises should ensure that the solutions from these vendors have the feature richness they require.

Cisco Systems has fallen behind in delivering solutions that address more-advanced application delivery requirements. Although Cisco's content services switch (CSS) and content switching module (CSM) products provided a solid foundation for server load balancing, the introduction of more-application-centric features is required. During 2003, Cisco focused on expanding its concept of a service layer in the data center with the introduction of virtual private network (VPN) and Secure Sockets Layer (SSL) blades in the Catalyst 65xx family. Cisco also introduced the CSS11501 to serve a broader base of enterprises. Enterprises should push Cisco to expand its vision of services to show greater integration and features. Without a significant effort to deliver a more-comprehensive offering focused at enterprise application deployment, Cisco will continue to lose ground to more-innovative vendors. Enterprises should only consider Cisco when requirements center around high-traffic, volume availability issues. Other vendors deliver better application performance optimization.

Nortel Networks continues to advance its product offering. During 2003, it introduced new platforms (the Alteon 22xx, 24xx and 3408), stronger integration into the Passport 8600, and new features such as route control, attack signature filtering and SSL VPN. Another significant initiative was the integration of Nortel's products into IBM and Hewlett-Packard blade server architectures. Although it made considerable progress on the product front, Nortel needs to add features for application performance optimization. Nortel continued to lose "mind share" during 2003. It has not taken advantage of the potential for more comprehensive solutions that are possible when considering the wide scope of Nortel products available for data center, access and WAN deployments. Enterprises should expect Nortel to expand its vision for Web-enabled application delivery during 2004.

Vendors in the Niche Players quadrant generally offer focused products that will excel in a specific technology area. Enterprises should consider niche vendors when they have requirements that closely match vendors in this quadrant. Inclusion of a vendor in the Magic Quadrant implies that all vendors can offer viable products or solutions for part or all of an enterprise's requirements in a market.

Array Networks is emerging from a difficult transition. Early visibility gained in 2002 quickly eroded because Array lost sight of its primary market and expanded into niche areas that did little to help its positioning. This led to product and support issues, and financial and organizational instability. During 2003, Array obtained new financing and sales increased, which should result in a financially stable company. The new senior management team is focused, again, on product offerings targeting Web-enabled application delivery. However, the early marketing luster and brand awareness has been lost. Although the Array TM (Traffic Manager) has some compelling features (memory-based caching and management interface being most notable), Array must differentiate its product more clearly. Before considering Array as a potential player in this market, enterprises must see specific features that can make a difference in their environment. Array must also demonstrate continued corporate and financial stability to warrant serious attention.

FineGround Networks and Pivia have been the leading software-based vendors in this market, concentrating solely on detailed application optimization to reduce latency, optimize application performance and reduce bandwidth consumption through a number of application-layer techniques. Although they compete against vendors such as NetScaler and Redline, their products are more complementary than competitive.

FineGround will broaden its appeal with the recent introduction of the Velocity appliance platform. Another differentiator is that FineGround provides detailed end-to-end monitoring with AppScope Performance Monitor. FineGround has generated brand recognition with solid technology.

To date, Pivia has done a better job at recognizing potential competitive pressures and partnering with key application vendors, which are important steps in its evolution. Pivia will broaden these channels in 2004, an attempt to integrate its technology into more software platforms.

The functions that these two vendors provide add another, and often useful, layer of application optimization into the Web-enabled data center architecture, especially when dealing with high-latency or low-speed connections. They need to align their products more closely with new and changing application challenges, and with application vendors and users. Enterprises should consider these solutions when situations demand the highest level of optimization. FineGround and Pivia's products should be considered as tactical purchases, with proven benefits.

Foundry Networks has had a modest impact across the enterprise market. Long known for providing high-performance, high-reliability load balancing, Foundry was left behind when the market shifted toward more-application-related features. Foundry still plays a role in high-performance enterprise data centers, but needs to expand its appeal. Product plans indicate that, through year-end 2004, Foundry will likely offer new software releases addressing key features. As support for SSL, connection management, compression and other capabilities come into the platform, Foundry will once again compete for new enterprise business. Equally important will be for Foundry to shift its positioning from hardware performance (often important in the service provider market) to one where it can articulate the value it brings to specific enterprise applications.

Nauticus Networks is a newcomer with a high-performance platform that allows for virtual systems on the same physical platform. Nauticus has struggled to get market recognition, especially in the enterprise. The announcements that Sun Microsystems plans to acquire Nauticus ends speculation of Nauticus' financial viability. However, enterprises should be cautious when considering Nauticus platforms for non-Sun environments until the direction within Sun is clearer.

Bottom Line: Innovation and solving customer product concerns are key to remaining viable in the market for Web-enabled application delivery. Due to continued developments and the dynamic nature of the market, no vendor can rest on its laurels. Enterprises should carefully match application requirements to the vendor or vendors that most closely meet their needs. As a result, enterprises should treat all purchases in this market as tactical, with short-term payback of no more than 18 months.

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