Research Note Markets 22 November 2002

The market for Web optimization products is the most dynamic in the networking infrastructure market. We see continued innovation, new vendors, good ideas and bad ones. Indicative of the dynamic nature of this market is that the number of vendors on our Magic Quadrant (see Figure 1) has increased from five to eight during the past six months, with the addition of Array Networks, NetScaler and Redline Networks.

Figure 1

Web Optimization Magic Quadrant

Source: Gartner Research

Array and NetScaler are approaching the market with relatively broad and competitive product offerings. Redline is attempting a more "Trojan horse" strategy that, on the surface, is complementary with the core features of incumbent players. Finally, one high-profile and well-funded startup (Nexsi Systems) shut its doors before making it to the market. Given the relatively small size of the market, it is unlikely Nexsi will be the last to exit.

Leaders

Once again, the two leaders in the Magic Quadrant are F5 Networks and Cisco Systems. Both continue to add features and platforms to their offerings.

We still consider F5 to be the thought leader in the market. It continues to add to a broad product offering and includes a dizzying group of features, some of which competitive vendors have built entire product offerings around. F5 needs to fine-tune its marketing and positioning to ensure key features and differentiation don't get lost. F5 most likely will continue to add capabilities that are compelling to the enterprise and will broaden its offering to concentrate on the natural consolidation points within the Internet data center (IDC). We are also seeing the fruits of F5's iControl strategy. Tangible examples of partner and end-user integration of iControl's functionality are emerging.

Although Cisco maintains a comprehensive product offering and can provide strong solutions for many applications, it is still wrestling with its approach to the Web optimization market. The battle between integrating content networking functions into Cisco's infrastructure products vs. building dedicated platforms confuses Cisco's story. Cisco has integrated the product development and marketing efforts for the entire portfolio; however, it must do considerable work to offer a more-consistent feature set between the two approaches. Code base integration between stand-alone and integrated products is still well off into the future, which is an additional cause for concern.

By YE04, Cisco's corporate strategy will be to fully integrate content networking functions deeper into standard platforms (0.7 probability); however, Cisco will continue to support both approaches as long as there is market demand. The newly introduced CSS115xx platform should be considered somewhat tactical in Cisco's overall strategy for content networking. Now that the CSS115xx SSL blade is finally shipping in volume, the new platform provides Cisco with a more-scalable and integrated platform for a number of IDC functions and offers a high-performance alternative for larger volume solutions. Although the stand-alone SSL appliances (SCA11xxx) from original equipment manufacturer Sonic Wall continue to be included in the portfolio, these products should be treated with extreme caution.

Visionaries

This quadrant is the landing spot for two of the new players, Redline and Array, as well as a continued home for Nortel Network's Alteon products.

Redline has carved out a small, but interesting, niche in the IDC by concentrating on two areas that are largely under the radar screen of the incumbents: connection management and compression. The value that Redline brings is that, in many circumstances, the combination of these two functions has significantly reduced server processes, improved performance to end users and reduced bandwidth use. This illustrates a growing trend for Web optimization products to focus on performance metrics, rather than on availability and scalability.

By remaining noncompetitive to larger incumbents, Redline can offer a "pain free" insertion option for sites already relying on other Web optimization products that have strong vendor relationships. Redline is not counting on displacing products, but will work in nearly any environment to improve performance. Although it sees the coming consolidation of functions within the IDC, it can position its product as complementary to other solutions.

Redline must protect itself from incumbent vendors that will start providing stronger proof points and features for their connection management capabilities (such as F5's One-Connect). It is also possible that, as part of a consolidation of functions, compression may be integrated into incumbent architectures. Although Redline can make a compelling case, enterprises should ensure that claims of short-term return on investment (ROI) are met for their specific application mix and environment.

Array's platform provides many of the features/functions required within the IDC to manage and optimize traffic delivery. These include L4-7 server load balancing, SSL termination, connection management, global load balancing and some content rewriting capabilities and in-memory caching. One of the unique aspects of Array's architecture is that it parses the TCP packet on entry into the device, adds appropriate services, recreates the packet and moves it on its way. This concept of parsing and adding a suite of services is reflective of a next-generation platform.

Another key factor with Array is its management interface, which provides an integrated view (and configuration and management) of all functions performed in the platform. For a new entrant, Array has done a noteworthy job to get name recognition in the market. It must now translate awareness into a revenue stream reflective of its marketing, sales and advertising efforts.

Nortel continues to develop its Alteon portfolio of products and has released a tight integration of the key content-switching blade into the Passport 8600. Unlike Cisco's solution, this blade has identical features and management to the stand-alone product offerings. In addition, Nortel can integrate third-party capabilities in its packet parsing and filtering to offer services such as an accelerated firewall (in partnership with Check Point Software Technologies).

Nortel's products remain competitive, and the vendor continues to innovate in the areas of security and greater application awareness. However, Nortel is held back in this market due to inconsistent handling of enterprise accounts and its lack of insight into enterprise data centers. Although maintaining a stable market share overall in the enterprise, Nortel must create stronger marketing messages around content networking (and other areas) to increase market awareness and penetration.

Challengers

Radware continues to offer a variety of point solutions. Although not fully embracing the degree of consolidation that is important for next-generation platforms, it has started some small-scale packaging of functions. Radware continues to innovate by applying its packet-inspection capabilities into new areas, such as security and bandwidth management. Radware has also been an innovator for providing link determination functions for multi-homing Internet service provider connections at the edge of the network, an area ripe for future functional capabilities. These efforts will continue to increase Radware's market awareness, with a resultant increase in revenue. Radware still has not significantly increased presence and awareness in North America, although an increase in resources has the potential to show benefits in the future. Radware continues to execute well internationally.

Niche Players

Foundry has done little to broaden its portfolio of products beyond server and global load-balancing features. Although these products support large IDC requirements, Foundry must add more-comprehensive functionality to maintain its position in this innovative market.

NetScaler is another new entrant that started with a focus on connection management. However, with its broader set of traditional features, it initially took a more-direct competitive approach than Redline. This resulted in a delayed sales cycle and more-difficult positioning in the market. During the past few months, especially after the introduction of the Request Switch 9000 platform, NetScaler modified its marketing and sales approach to be more complementary. It has started to increase business and grow its customer base. Over time, NetScaler will broaden the scope and reach of its platforms to take advantage of this installed base. NetScaler has a sound technical vision. To succeed, it must put its initial marketing and positioning missteps behind it and focus on building on its strong technical underpinnings.

Bottom Line: The Web optimization market continues to undergo significant innovation. New products and features continue to solve real-world problems, and more functionality is being added to address specific enterprise application requirements. However, in the long run, there will be fewer key players. In the meantime, products that provide a short-term return on investment are low-risk investments. The more-full-featured and comprehensive infrastructure offerings should be evaluated to ensure not only a technology fit, but a long-term viable offering.

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