Aberdeen Group Analyst Insight: Cloud Services Redefine the Need for WAN Optimization.

1. December, 2010
Cloud Services Redefine the Need
for WAN Optimization
In September 2009, Aberdeen found the business adoption of cloud Analyst Insight
computing carried enormous potential cost savings and other efficiencies, Aberdeen’s Insights provide the
but not without risk. In the year since that study, IT managers in every type analyst perspective of the
of organization and across every industry have had to address the question research as drawn from an
of cloud migration through taking specific actions: conduct a cost/benefit aggregated view of the research
analysis, develop a strategy, allocate resources, and begin to execute. For surveys, interviews, and
many, only then do the risks become clear, materialize into real threats, and data analysis
in some cases have disastrous results that could be avoided with the proper
precautions. Based on a new study conducted by Aberdeen Group in Cloud Architectures
December 2010, this document explores the changing - but still vital - role WAN Optimization solution
of network performance monitoring and management solutions in the providers have responded to
successful cloud-enabled enterprise. the rising adoption of cloud
computing by developing
The Objective of WAN Optimization products to address specific
cloud architectures, which
The top two pressures compelling organizations with both on-premise and include:
cloud-based architectures are the same: the thirst for more bandwidth and
the need to accommodate an increasingly mobile workforce. After that, it √ Private: in the corporate
data center, managed by
gets more interesting (Figure 1).
internal IT staff
Figure 1: WAN Optimization for Cost vs. Customer Satisfaction √ Managed private: in the
corporate data center,
Increasing bandwidth requirements from 83%
managed by a contract
applications or services 76% services provider
57% √ Hosted private:
Increasing demands of remote workforce
51% enterprise- owned hardware
co-located in a third-party
Data communications is too expensive 44% data center (may be
20% managed by internal IT staff
Need to improve responsiveness to external
or by a third-party)
20%
customers 46%
√ Virtual private: third-
Employee productivity is unsatisfactory or could
On-Premise party, hosted, owned and
26%
be improved 37% Cloud managed
√ Public: infrastructure-as-a-
0% 20% 40% 60% 80% 100%
service (often offered in a
Source: Aberdeen Group, December 2010 subscription or pay-per-use
model)
As shown in Figure 1, organizations heavily invested in on-premise solutions
are more than twice as likely to be looking to WAN Optimization as a cost- √ Hybrid: an integrated
cutting measure. Organizations that have migrated to a cloud platform for combination of two or more
of the above
their business-critical applications are more focused on improving user
© 2010 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897

2. Cloud Services Redefine the Need for WAN Optimization
Page 2
experience. This finding points to the fundamental challenge in supporting
cloud-based applications, the inherent latency introduced by a more
complex network infrastructure and the impact that latency has on end-user
experience. WAN Optimization technologies address both the cost and the
user-experience challenges; however, the overriding purpose of investing in
WAN Optimization solutions is a function of the nature of the network
topology.
Why Networking Cost is Less of an Issue for Cloud Users
The finding also points to the fact that organizations that have migrated to a
cloud environment have, in so doing, addressed the cost-of-networking
pressure. Quite simply, the total cost of network ownership, management,
and support is lower in a cloud computing environment (Figure 2).
Figure 2: Annual TCO of Network Services Per Employee
$120.00
$100.00
Hardware
$28.59
Software
$80.00 Services
Management
$25.52
$60.00
$40.00 $12.80
$24.27
$8.40
$20.00 $7.96
$24.96
$15.37
$0.00
On-Premise Cloud
Source: Aberdeen Group, December 2010
As is evident in Figure 2, the average total cost of networking services per
employee in a cloud environment is less than half that of an on-premise
environment. In addition, the projected increase in cost for the coming year
(2011) is 5.8% for on-premise users and only 3.9% for cloud users.
The Performance Hit from Cloud Migration
It is important to draw a distinction between applications that are tolerant
of latency and those that are not. Some latency introduced into an email
system as a result of cloud migration does not demand compensation, since
email is an asynchronous form of communication. Whereas, latency
© 2010 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897

3. Cloud Services Redefine the Need for WAN Optimization
Page 3
introduced into an application that depends on real-time delivery of voice or
video renders the application unusable without additional investment in
bandwidth. As is shown in Figure 3, the cost benefit of cloud migration is
negated in the case of VoIP.
Figure 3: Change in Cost of Service from Cloud Migration
16%
14.3% On-Premise Cloud 13.8%
14% 13.0%
Year-over-Year Increase in Cost
12%
10% 9.3%
8%
6%
4%
2%
0%
Email VoIP
Source: Aberdeen Group, December 2010
This is why organizations that have migrated their critical business
applications (especially synchronous communications applications, such as
VoIP) to the cloud are turning to WAN Optimization for performance
reasons.
WAN Optimization for Network Throughput
The key to maintaining end-user or customer satisfaction when working in
dynamic, elastic, environments like the cloud - that is difficult or impossible
to monitor and control - is in improving overall data throughput. WAN
Optimization's impact on throughput improvement in an on-premise
environment is well-documented in prior Aberdeen research (see
references at the end of this document). The left two bars of each group in
Figure 4 show that the introduction of WAN Optimization solutions
accelerates throughput performance increases for email, CRM and VoIP
applications, just to identify three of the most common types of application.
The interesting finding here is the relative importance of WAN
Optimization for synchronous communications applications, typified by
VoIP. Whereas its impact on an on-premise VoIP system is equal to about a
19% acceleration, applied in a cloud environment, the impact is over 30%.
And while the net result is that voice communications in the cloud still
suffer lower overall throughput improvement than their on-premise
counterparts, the value of applying WAN Optimization to VoIP services is
relatively much greater.
© 2010 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897

4. Cloud Services Redefine the Need for WAN Optimization
Page 4
Figure 4: The Impact of WAN Optimization on Network Application Throughput
With WAN Optimization Without WAN Optimization
25%
20.8% 21.6%
19.0% 19.2% 19.6%
20% 18.9%
17.5%
16.5%
15% 13.9%
12.7%
11.2%
10% 8.0%
5%
0%
On- Cloud- On- Cloud- On- Cloud-
Premises based Email Premises based CRM Premises based VoIP
Email CRM VoIP
Source: Aberdeen Group, December 2010
WAN Optimization Addresses Risks in Cloud Migration
Several significant risks arise when an organization considers migrating
critical business systems to the cloud. They include:
• Increased system complexity
• Risk of data loss
• Vulnerability to security breach
• Inability to gain a holistic (end-to-end) view of network activity
Our research shows that WAN Optimization technologies provide an
avenue for addressing and mitigating these risks. The risks vary depending
on the type of cloud architecture (see sidebar on page 1) and solutions have
been developed that are tailored to meet the individual requirements of
each.
System Complexity
As critical business applications are migrated to a cloud platform,
(particularly given the myriad underlying virtualization paradigms that may
be introduced to support application delivery), the network, the servers and
storage arrays, the data, and the applications change from a static set of
technologies to a dynamic one. Real-time load balancing, dynamic
provisioning of resources, and new sources of latency combine to make
root-cause analysis challenging. In this scenario, providing IT support to
maintain required service levels becomes more complex. Forty-seven
percent (47%) of IT administrators surveyed indicate that the rising
complexity of their infrastructure (at the network, server, and application
© 2010 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897

5. Cloud Services Redefine the Need for WAN Optimization
Page 5
levels) is a major challenge. While WAN Optimization does not make the
infrastructure simpler, it does provide deeper visibility into network traffic,
resource utilization, and application delivery metrics. This gives the
administrator a tool to improve root cause analysis and, ultimately, speeds
issue resolution.
Risk of Data Loss
IT managers responding to our survey indicate that without WAN
Optimization technologies in place, incidents of data loss have risen 8% over
the last year. Especially in the case of cloud architectures involving third-
party hosted infrastructure, the risk of data loss due to system crash, packet
error, administrator error, or backup/restore failure is rising with the rise in
infrastructure complexity (Figure 5).
Figure 5: WAN Optimization's Impact on the Risk of Data Loss
15 With WAN Optimization Without WAN Optimization
11.8
YoY Percent Change in Risk of Data Loss
10
5 4.1
0
Cloud On-Premise
-5
-6.6
-10
-12.8
-15
Source: Aberdeen Group, December 2010
However, as Figure 5 illustrates, WAN Optimization solutions address the
rising incidence of data loss, giving on-premise IT administrators a 6.6%
decrease in data loss events, year-over-year. Furthermore, WAN
Optimization offers administrators of cloud-based systems an even greater
return. The source of the advantage lies in the ability of the IT security team
to implement additional safeguards in the form of redundancy, data
mirroring, more frequent backups, software-based controls that guard
against accidental user error, and deep packet inspection. While these are
not necessarily features of a WAN Optimization solution, it is the
optimization function that allows these additional controls to be put in place
without a negative impact of system performance and, by extension, end
user experience.
© 2010 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897

6. Cloud Services Redefine the Need for WAN Optimization
Page 6
Data Security
Encrypting data is more important to overall IT security when the data is
traveling along unpredictable paths, as is the case in a cloud environment.
However, without WAN Optimization, cloud-based IT administrators are,
on average, encrypting a lower percentage of their data than administrators
of on-premise architectures (Figure 6). This is due to the unwanted addition
of latency introduced by encrypting data in motion.
Figure 6: WAN Optimization Allows More Data Security
60%
With WAN Optimization Without WAN Optimization
50.0%
50%
39.4%
40% 37.2%
33.8%
30%
20%
10%
0%
Cloud On-Premise
Source: Aberdeen Group, December 2010
Conversely, those using WAN Optimization solutions are free to encrypt
more of their data as it moves from server to server or from server to
workstation because WAN Optimization eliminates much of the latency,
not necessarily from the encryption process but from elsewhere in the
system. Here again, it is the optimization function that allows additional
controls to be put in place without a negative impact of system performance
and, by extension, end user experience.
A Holistic View of Network Activity
Especially in the case of cloud architectures involving third-party hosted
infrastructure, it is very difficult to gain a true end-to-end view of the
movement of information, pinpoint bottlenecks, and manage the network to
optimize throughput. A collection of tools can be used to reveal activity on
each layer. However, without a unified platform to consolidate the
information coming from those analysis tools, the IT administrator has a
very difficult time gaining a holistic picture and making sense of the data.
For this reason, IT administrators who responded to Aberdeen's survey
indicating that they already use WAN Optimization solutions for their cloud
infrastructure also indicated they have or plan to adopt integration tools to
help them manage more holistically (Figure 7).
© 2010 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897

7. Cloud Services Redefine the Need for WAN Optimization
Page 7
Figure 7: Adoption of Unified View of WAN Performance
Current Planned within 12 months Planned beyond 12 months
API for integration with
other network management 24% 31% 22%
platforms
Unified platform for
managing application
42% 39% 7%
performance visibility and
QoS (Quality of Service)
Single Platform for WAN
21% 34% 14%
Optimization and Security
0% 20% 40% 60% 80% 100%
Source: Aberdeen Group, December 2010
Within the next 12 months, over 80% of our survey respondents will have
the ability to manage application performance and WAN quality of service in
a single dashboard. Over half will have a single platform unifying WAN
performance management and WAN security. In a dynamic and increasingly
complex environment, only the fully armed IT manager will be able to keep
pace with user demand, manage cost, and maintain or improve overall
quality of service.
The CTO's Business Case for WAN Optimization
Our research reveals that technology obsolescence, the pending expiry of
equipment leases and software licenses, and major new releases of software
solutions are prime motivators causing CTOs to reevaluate the IT
architecture. Twenty-one percent (21%) of survey respondents who lease
WAN Optimization equipment indicate that their lease will expire within
the next 12 months. This is significant because as the CTO contemplates
renewing such a contract, other significant initiatives such as VoIP and
telepresence deployments, server and storage virtualization projects, and
potential managed services agreements influence the decision.
In these critical times, the well-prepared IT manager must present a
comprehensive cost/benefit analysis to the CFO or other primary budget-
holder using data that is not readily available. WAN Optimization tools can
provide assistance in scenario planning through network emulation and
performance impact simulations so that the CTO can present real numbers
in the proposal. Here, the value of a holistic view of the infrastructure,
architecture, and traffic helps to verify and validate emulation results.
© 2010 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897

8. Cloud Services Redefine the Need for WAN Optimization
Page 8
Key Takeaways
When considering cloud migration, either at the network, server, or
application level, the following are some of the strategic actions and best
practices that curb costs, improve performance, and mitigate risk:
• Identify the sources of bandwidth demand within the organization
and the cost of satisfying that demand
• Consider the cost/benefit of migrating critical business applications
to a cloud architecture, and be careful not to ignore the inherent
risks
• Understand the difference between synchronous and asynchronous
data applications and allocate bandwidth and optimization
technologies appropriately
• Evaluate the risk of data loss and network vulnerabilities and apply
redundancy, encryption, and other security technologies – being
careful not to introduce latency into applications that cannot afford
it
• Adopt a unified platform for holistic, end-to-end network visibility
and leverage the resulting intelligence to make strategic decisions
relating to new bandwidth procurement, network upgrades, and
cloud and virtualization initiatives
• Prepare a business case for WAN Optimization investment by
understanding the impact of upcoming architectural and software
changes
Aberdeen's research has shown that IT managers in every type of
organization and across every industry must address the challenge of
providing cost-effective, high-quality network services to satisfy a growing
demand for bandwidth, an increasingly complex infrastructure, and new
choices in the data center. A critical component of the solution to those
challenges is improving the performance of the WAN and an effective way
to gain the intelligence and flexibility to accomplish that is by leveraging
WAN Optimization tools.
For more information on this or other research topics, please visit
www.aberdeen.com.
© 2010 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897

9. Cloud Services Redefine the Need for WAN Optimization
Page 9
Related Research
The CIO's View of Security and Cloud Optimizing the Performance of Web
Computing; June 2010 Applications - Directions for
Improvement; October 2009
Business Adoption of Cloud
Computing; September 2009
Author: Russ Klein, VP and Group Director, IT Research
(russ.klein@aberdeen.com)
Since 1988, Aberdeen's research has been helping corporations worldwide become Best-in-Class. Having
benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide
organizations with the facts that matter — the facts that enable companies to get ahead and drive results. That's why
our research is relied on by more than 2.2 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of
the Technology 500.
As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted
marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-
Hanks (Information – Opportunity – Insight – Engagement – Interaction) extends the client value and accentuates the
strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com
or call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com
This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies
provide for objective fact-based research and represent the best analysis available at the time of publication. Unless
otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be
reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by
Aberdeen Group, Inc. 010110a
© 2010 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897