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White Paper

The Impact of Data Center


Consolidation on
Branch-Office Performance
Research conducted by:

September 2005 Sponsored by:


The Impact of Data Center Consolidation on Branch-Office Performance

Contents
Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Profile of Respondents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Applications Located on Central Servers vs. Local Servers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Monitoring Non-TCP Traffic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Challenges of Delivering Applications to Remote Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Steps Taken to Address Challenges of Remote Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Planned Steps to Address Branch-Office Performance Challenges . . . . . . . . . . . . . . . . . . . 9

Justifying the Investment: No ROI Needed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Case Study – Summary – Global Enterprise Software Company . . . . . . . . . . . . . . . . . . . . . . 12

September 2005 | Page 2 of 12


Research conducted by: Sponsored by:
The Impact of Data Center Consolidation on Branch-Office Performance

The Impact of Data Center Consolidation on


Branch-Office Performance
Overview
In August 2005, Computerworld invited its IT influencer audience to participate in a short survey on challenges
companies are seeing in their quest to deliver applications and services to branch and remote offices. In this
survey we also wanted to determine whether business-critical applications are deployed in a distributed manner
or a centralized manner (from the data center). The goal of the survey was to better understand the challenges
that larger enterprises (500 or more employees) face related to keeping their branch-office workers connected
to important applications, which are most often centralized, and the strategies companies have taken and plan
to take to address those challenges. The survey was commissioned by Silver Peak Systems Inc., but data was
gathered and tabulated independently by Computerworld Research. The following report represents top-line
results of that survey.

Profile of Respondents
Total respondents: 348
All 348 respondents were qualified through screening questions as being in companies with 500 or more
employees and being personally responsible for purchasing or recommending the purchase of LAN/WAN or
data center equipment and applications.
How many employees are at your organization?
500-1,000 18.4%
1,001-5,000 29.6%
5,001-10,000 14.7%
10,001-25,000 10.9%
More than 25,000 26.4%

What is your company’s primary industry?


Manufacturing 12.7%
Technology 11%
Education 13.5%
Health care 8.1%
Professional scientific
and technical services 4.9%
Financial services 3.7%
Banking 4.3%
Telecommunications 3.2%
Insurance 4.6%
Retail (brick-and-
mortar and online) 4%
Services 2.3%
Media/entertainment 2.6%
Food services 1.2%
Transportation 1.7%
Energy 2%
Utility 1.2%
Pharmaceuticals and
biotechnology 1.2%
Construction 0.3%

September 2005 | Page 3 of 12


Research conducted by: Sponsored by:
The Impact of Data Center Consolidation on Branch-Office Performance

Executive Summary
Larger organizations (500 or more employees) generally locate their important applications centrally (in the data center)
and have them remotely accessed by branch offices, rather than locating them on servers in branch offices. This drives the
need for products that optimize the performance and security of applications delivered over the enterprise WAN to users in
branch offices.

• In the past 12 months, more than 80% of IT and networking influencers managing branch-office infrastructure
and/or applications have faced multiple challenges, the greatest of which is slow user response time and unaccept-
ably slow application performance for users in branch offices.

• To combat the multitude of challenges related to application performance in the branch office, organizations have
taken a number of steps in the past year. The most popular step has been to upgrade networking equipment and to
purchase additional servers. We also see respondents split on taking either a distributed approach (moving more
server resources to branch locations) vs. a centralized approach (bringing servers from branches to a consolidated
data center).

• Influencers are less sure about steps their organizations will take in the coming year and a half, but they continue to
look to networking upgrades. There is also the potential for an increase in purchases of compression, packet-shap-
ing (QoS) or similar WAN-optimization products.

• Organizations have taken multiple steps to address branch-office challenges without having to justify the steps
with traditional ROI and cost-reduction arguments. The pain points related to remote access have allowed them to
take these steps with softer arguments about the promise of improved application availability and user productivity.

September 2005 | Page 4 of 12


Research conducted by: Sponsored by:
The Impact of Data Center Consolidation on Branch-Office Performance

Applications Located on Central Servers vs. Local Servers


To get a sense of how large organizations are giving their remote offices access to important applications, it’s important to
first examine where these applications live – on central servers or local servers. All of the applications we asked about were
far more likely to be located on central servers and accessed remotely rather than located on local servers at the branch
offices. The most likely application to be housed centrally, HTTP/HTTPS/Web-based traffic, for example, is located on
central servers for close to 69% of respondents and located locally for only 20.7% of respondents. Voice over IP was the
only type of application where we saw that the number who housed it locally approached the number of those who kept it
on the central servers. The message here is that more than likely, if it’s an important application, branch offices and remote
offices are accessing it on the central server, are experiencing notable performance challenges that impact productivity
and therefore require effective solutions that can provide secure, LAN-like performance.
It is also worth noting the anticipated rise in plans to deploy both streaming video and VoIP solutions, with 10% to 16%
planning to add these services, respectively. This may represent a shift in the type of WAN traffic, since these are both
UDP-based rather than TCP-basedapplications.

Note: VoIP and streaming video, which are both UDP applications (non-TCP applications) are expected to see double digit
growth in the next 18 months.

September 2005 | Page 5 of 12


Research conducted by: Sponsored by:
The Impact of Data Center Consolidation on Branch-Office Performance

"The application and Monitoring Non-TCP Traffic


protocol-specific nature
Just over half of organizations polled (51.4%) are monitoring non-TCP traffic across their WANs. When those who are
of most acceleration
point products limits monitoring non-TCP traffic were asked what percentage of their traffic this represents, we see that non-TCP
larger enterprises’ ability traffic, which includes VoIP, streaming video, NFS and proprietary applications, represents on average 27% of traffic. This is
to roll these products out a big departure from expectations, as many people tend to believe that TCP accounts for almost all of the traffic on their WAN.
other than on a tactical
basis. "Head end scala-
bility – the ability to ‘fan- Do you monitor or measure the amount of non-TCP traffic across your wide-area network?
out’ and support hun-
dreds or even thousands
of office connections – is
another concern with
current approaches. By
overcoming these limita-
tions with Local Instance
Networking, Silver Peak
can now interface with No Yes
CIO’s on a strategic 48.6% 51.4%
level, helping to drive the
re-architecture and
consolidation of branch
office infrastructure."
Jim Metzler,
Ashton, Metzler &
Associates

What percentage of traffic, on average, is non-TCP traffic


(UDP traffic such as VoIP, video, NFS and proprietary applications running on UDP)?

10%-25% 35%

26%-50% 16%

51%-75% 3%

76%-100% 3%

Don’t know 43%

“Non-TCP traffic, which includes VoIP, streaming video, NFS


and proprietary applications, represents on average 27% of
traffic. This is a big departure from expectations as many
people tend to believe that TCP accounts for almost all of
the traffic on their WAN.”

September 2005 | Page 6 of 12


Research conducted by: Sponsored by:
The Impact of Data Center Consolidation on Branch-Office Performance

“We installed the Silver Challenges of Delivering Applications to Remote Offices


Peak NX appliances with
the goal of reducing When asked about the challenges they face when delivering/deploying applications to remote offices, a full 80% of
remote-office server respondents cited one or more challenge, showing that IT and networking professionals managing branch-office infrastruc-
sprawl. We saw tures have multiple pain points and are in a constant struggle to keep their systems running efficiently. Respondents
immediate benefits for overwhelmingly pointed to slower or unacceptable response time and slower performance of the application as the No. 1
multisite software challenge.
development and
improved performance Close to 246 of respondents cited this challenge, while the next highest challenge, bandwidth utilization and cost, was
over the WAN of our cited by just over half of respondents. Despite the fact that the lack of speed stood out well above the rest, all of the chal-
business-critical applica- lenges listed garnered a good share of responses. There wasn’t one challenge that at least 28% of respondents hadn’t
tions. We have been duly been aeffected by in some way.
impressed with the dra-
matic impact the Silver
Peak devices have had Slower or unacceptable response time/
on our WAN bandwidth performance of application 70.7%
utilization, as well as the
reduced need for future Bandwidth utilization/cost 56%
server deployments.”
Grant McCormick, Increased security risks associated with
CIO, dedicated equipment in distributed offices
51.1%
Verity
Availability/reliability/disaster recovery/
backup requirements 50%

Increased network management complexity 50.3%


Application patch management – managing
the various software releases for applications 45.7%
Scalability of network infrastructure 44.8%
Device patch management – managing the
various software releases for network 47.4%
elements (routers, firewalls, etc.)
Poor server utilization 37.1%

Lack of visibility into WAN/network usage 33%

Increased network management complexity 30.7%


Increased cost of compliance with HIPAA,
Sarbanes-Oxley, Gramm-Leach-Bliley 28.7%
and/or requirements
None of the above 7.8%

September 2005 | Page 7 of 12


Research conducted by: Sponsored by:
The Impact of Data Center Consolidation on Branch-Office Performance

“Rapidly increasing Steps Taken to Address Challenges of Remote Access


security and compliance
concerns as well as
Just as we saw that larger organizations are facing multiple challenges related to remote access, they are also taking
escalating IT costs are multiple steps to address those challenges. A full 86.5% of respondents have in the past 12 months taken one more of the
driving enterprises to steps listed. The most popular move has been to upgrade networking equipment – a step taken by roughly 70% of organi-
consolidate data centers zations polled. The hope is presumably that by taking this step, they can directly address some of the speed problems their
and centralize business- branch employees are finding and generally improve the remote access experience. It’s interesting to note that roughly
critical applications. 44% of respondents are planning to take a distributed approach to address their challenges by adding more servers to
However, application remote locations, while a similar number (43%) are looking to centralize by moving branch-office servers into a consolidated
performance often data center. Although these are two distinctly different approaches, each is being tested by an equal portion of respondents.
forces companies to
place servers and
application infrastructure
Upgraded networking equipment
in local offices, (routers, switches, access devices) 70.4%
driving up support costs.
This has created a
Purchased or upgraded
demand for products network security devices 55.2%
that enable the central-
ization of business-
critical applications and Upgraded bandwidth of WAN links 51.1%
IT resources. The result Deployed/distributed more
is an application acceler- servers and equipment within each
ation market that is remote/regional/branch office 43.7%
expected to reach $1.5 to improve performance
billion this year, which is Moved servers and network equipment out
a 50% increase over of branch offices and into consolidated data
42.5%
2004.” centers to reduce cost
Joe Skorupa, Migrated from private-line WAN (frame, 36.5%
Research Director, ATM) to IP VPNs between offices
Gartner Inc.
Turned on packet-shaping (QoS) 28.4%
features within existing routers

Leveraged consultants to tune 23.6%


application performance

Still in planning/investigation stage 24.1%

Purchased compression,
packet-shaping (QoS) or similar 22.1%
WAN-optimization products

None of the above 13.5%

“A full 86.5% of respondents have in the last 12 months


taken one more of the steps listed.”

September 2005 | Page 8 of 12


Research conducted by: Sponsored by:
The Impact of Data Center Consolidation on Branch-Office Performance

Planned Steps to Address Branch-Office Performance Challenges


In general, respondents had less of a grasp on the steps they’d take in the next 18 months than they did of those they took in
the past year. However, a full 81% of respondents still plan to make ongoing investments to improve the challenges they face
with branch offices, including poor application performance.
For each of the steps taken in the past year, we see a lower percentage citing them for the coming year and a half, showing
that organizations haven’t yet set anything in stone. It’s also interesting to note that the only step that actually shows an increase
in the coming 18 months compared with the past year is purchasing compression, packet-shaping (QoS) or similar WAN-opti-
mization products. In addition, a nearly equal number plan to rely on consultants to help tune existing application performance.
Although the increase is slight, it does indicate that enterprises may be shifting from tactical, “brute force” upgrades of network
and server infrastructure to more strategic investments in approaches that will more effectively utilize their current resources.

Upgraded networking equipment 70.4%


(routers, switches, access devices) 33.3%

Purchased or upgraded 55.2%


network security devices 32.2%

Upgraded bandwidth of WAN links 51.1%


33.3%
Deployed/distributed more
servers and equipment within each 43.7%
remote/regional/branch office 25%
to improve performance
Moved servers and network equipment
out of branch offices and into 42.5%
consolidated data centers to reduce cost 25%
Migrated from private-ine WAN
(frame, ATM) to IP VPNs 36.5%
between offices 25.6%
Turned on packet-shaping (QoS) 28.4%
features within existing routers 26.1%

Leveraged consultants to tune 23.6%


application performance 19.3%

Still in planning/investigation stage 24.1%


24.4%
Purchased compression,
packet-shaping (QoS) or similar 22.1%
WAN-optimization products 25%

None of the above 19%


13.5%

Steps taken in the past 12 months


Planned steps in the next 18 months

September 2005 | Page 9 of 12


Research conducted by: Sponsored by:
The Impact of Data Center Consolidation on Branch-Office Performance

“We installed the Silver Justifying the Investment: No ROI Needed


Peak NX appliances to
As we’ve seen, large organizations have already taken many steps to address their branch-office issues and are planning
handle our increasing
disaster recovery and additional steps in the coming months. What is most interesting is how they’ve justified such steps at their organizations.
business continuity When asked what they’ve done to get approval on making some of these very costly steps, we see a very interesting pattern.
requirements. After
The two steps respondents were least likely to have used were the ROI- or cost-reduction-specific steps. This means that
deploying the Silver Peak
solution, we saw imme- the majority of the time, organizations are able to justify investment in addressing these remote access issues without
diate benefits in the form having to make a traditional ROI or quantifiable cost-reduction argument. Most of the justifications organizations are
of reduced backup times making are less quantifiable measures like “improved application availability” and “improved user productivity.” While both
and increased applica- are extremely important, they’re softer measures, which means that organizations are feeling such pain from these remote
tion performance to our access challenges that they’re taking action without all of the justification sometimes needed for IT investments.
disaster recovery site.”
Eric Beasley,
Senior Network
Administrator,
Baker Hill, an Experian
Improved application
company availability/reliability/resiliency 63.2%
Improved user productivity (as a result
of improved performance) in a 58%
tangible and measurable way

Improved security for branch-office/


remote-office workers 41.1%

Reduced the level of support calls


to the NOC and/or applications groups 36.8%
from employees
Implemented mandated
compliance requirements 31.3%

Steps taken resulted in capital


expense upfront but reduced recurring 30.7%
IT support costs
Completed a detailed ROI analysis and
presented to management for approval 25.9%

Reduced bandwidth cost and/or enabled


deferment of capital expense 23.6%

Other 9.5%

None of the above 10.3%

September 2005 | Page 10 of 12


Research conducted by: Sponsored by:
The Impact of Data Center Consolidation on Branch-Office Performance

Conclusion
Given that typical large organizations locate their major applications centrally and are faced with major challenges related
to their branch-office workers accessing these applications, there is clearly a continuing need for solutions that can
securely provide LAN- like performance for branch-office workers without breaking the IT budget.
Another interesting trend is the possible shift in the type of WAN traffic, with VoIP and streaming video as the two
applications that are expecting healthy deployment growth over the next 18 months, according to our respondents. This
is notable because it represents a shift in WAN traffic types – as both these applications are UDP-based and not TCP-
based applications.
Any organization in the market for such solutions or looking to upgrade can take a queue from respondents in the survey
who pointed to the major challenges of managing such systems. Almost 87% of respondents have spent a lot of time and
money upgrading networking equipment, and almost 71% are also still challenged by slower or unacceptable user
response time and slow application performance.
The good news for those seeking new solutions is that they may not need to cling to difficult ROI measures to justify to
their management that an investment is necessary. As was shown in this study, organizations across the country are taking
the necessary steps without an ROI justification, which in itself shows the intensity of the challenges they’re facing.
A key for any organization in this situation will be to choose a solution provider that understands the specific needs of a
larger organization and that can help them express the key benefits of improved application availability and improved
user productivity.

September 2005 | Page 11 of 12


Research conducted by: Sponsored by:
The Impact of Data Center Consolidation on Branch-Office Performance

Case Study – Summary – Global Enterprise Software Company


Challenges:
• Business-critical software development application performing slowly
• Transferring high amounts of content between sites – moving data via FedEx
• Transaction applications (Web, Oracle) running less than optimal
• Elongated development cycle; employees very unhappy, lower productivity,
• Recent increase in support calls to network ops and application teams
• Transferring core intellectual property over public network – very concerned about security and assurance
• Exchange servers distributed across multiple hub locations, consuming network bandwidth

Solution:
• Deploying Silver Peak NX-3500’s in three major locations connected by fractional DS3’s
• Install time: Under 30 minutes per location

Result:
• Initial results show less than 30 times the average data reduction for tested applications
• Through Silver Peak management console, customer is able to view performance statistics for all application flows in
real-time and can monitor all traffic at the application level
• Benefits all applications running over the WAN
• Major productivity increase
• Drastic reduction in employee support calls to the support center
• Alleviates CIO’s concern about security, since IPsec with128; AES encryption is used between offices and disk stor-
age is encrypted
• Eliminated need to buy additional servers in remote offices and further upgrade bandwidth

September 2005 | Page 12 of 12


Research conducted by: Sponsored by: