A tech-support call starts it all. Why is my application running slow? What happened to my spreadsheet data? Is HQ using a 56K modem to handle traffic for my branch office - again? The number of calls suddenly increases, and network analysis reveals unforeseen usage spikes at a new marketing location. The dream of data-centre consolidation turns into a nightmare.

IT managers at large companies with many branch offices or retail locations increasingly are relying on WAN optimisation to address slow application performance over sagging, slow and over-used networks. Yet, because these same companies are so distributed, implementing a comprehensive strategy to resolve network congestion issues isn't easy. In addition, upgrading switches and carrier lines can be prohibitively expensive.

The emerging answer

Enter managed WAN-optimisation services. A host of providers including AT&T, BT Global Services and Verizon Business have beefed up their managed-services portfolios with options for boosting application performance over their networks.

The services perform the same duties as a WAN-optimisation appliance from such companies as Citrix Systems, Riverbed Technology or Silver Peak Systems, yet offload the installation, configuration and maintenance chores to the hosted provider. Managed WAN-optimisation services address unresponsive applications, slow transmissions and network congestion; more and more they also are providing relief for companies that don't have a dedicated network-optimisation staff or the time to tweak applications for improved performance.

Like its hardware-based alternative, a managed WAN-optimisation service can help a company avoid bandwidth upgrades. Such was the case at Denso Thermal Systems, an Italian-headquartered automotive parts maker that avoided massive upgrades at 14 sites in three countries by using a WAN-optimisation service from Orange Business Services. Orange's Business Acceleration suite offers analysis, through which Denso established optimisation priorities for mission-critical applications, plus management and optimisation through data compression, traffic-shaping and other techniques.

"We thought we would need to upgrade sites in order to improve application performance," says Silvio Bonetto, IT director at Denso. "Instead, traffic is optimised though the Orange Business Acceleration offering."

Large companies like Denso choose managed WAN-optimisation services over in-house appliances for several reasons, says Joe Skorupa, a Gartner expert on WAN optimisation. One reason is tactical: A WAN-optimisation service can adjust quickly to organisational needs. It scales with expansion and gives IT managers more flexibility to solve physical network slowdowns while avoiding the high expense of retrofitting branch offices with WAN-optimisation appliances. For example, if a retailer decides to open several new stores internationally but bandwidth is prohibitively expensive, IT can use a managed WAN-optimisation service to get desired throughput for point-of-sale applications.

In addition, the decision can be one of capital expense vs operational cost, Skorupa says. Adding WAN optimisation to an existing service is just another item on an expense line -- as opposed to a capital expense, which requires approval.

Avoiding a capital expenditure was what drove Sensata Technologies to managed WAN-optimisation. The US company, which makes sensors and controllers for the automotive, manufacturing and airline industries, potentially faced spiralling costs as it planned how to address network congestion at 46 sites worldwide. At some locations, costs for deploying a faster physical line to the building would have been exorbitant.

Tom Connors, manager of enabling technologies at Sensata, cites the Dominican Republic, where the company has a newly acquired plant, as one trouble spot. "The cost of a T1 there is extremely high compared to our other manufacturing sites. A WAN compression box was cost- and functionally effective, but [after a company transition] we went with a managed network and managed WAN-optimisation was a natural fit."

Sensata uses a managed WAN-optimisation service from Virtela Communications. Although Connors reports no problems integrating the service, he has one lesson to share: IT had to configure such applications as Microsoft Exchange to use consistent switch-ports rather than what Connors calls "pseudo-random" ports -- those configured as virtual ports that can change based on the network configuration and potentially conflict with applications. This is one of the precautions companies doing WAN optimisation should take: Often, compression algorithms and caching work best when the network configuration stays stable.

When it works - or doesn't

Other rules of thumb apply, too. For example, a managed WAN-optimisation service is great for companies that have Web applications where access is unpredictable and the nature of those transactions -- many small bits of data -- is easy to optimise, Skorupa says. Likewise, a company with a fast network -- established for video and media distribution, for example -- would not benefit greatly from a managed WAN-optimisation service. The greater the physical-network speed, the more a managed service will charge for optimisation: a fact that often distinguishes entry-level vendors from the top tier.

Optimisation is much more effective when data is not encrypted or compressed, adds Peter Sevcik, president of consulting firm NetForecast. That often has companies in the financial, health and legal sectors avoiding managed services, because trusting optimisation to an outside vendor might mean a potential breach of unencrypted data, Skorupa says.

For the most part, managed WAN-optimisation services work independently of the application framework, meaning a service can compress Adobe Flex data just as easily as Microsoft .Net data, Sevcik says. In addition, performance gains from a managed WAN-optimisation service essentially are the same as those a company would achieve using an appliance. The reason? Enterprises and carriers are using the same WAN optimisation gear, he says.

Carriers, however, are more apt to update their equipment more quickly than an enterprise will, says Charles King, an analyst with Pund-IT. "This results in customers enjoying optimised network performance without any of the headaches and hassles of purchasing, managing or maintaining that equipment themselves. For smaller companies, managed services offer levels of performance that would be nearly impossible for them to afford themselves. The benefits to enterprises mainly reside in being able to eliminate upfront costs and long-term management expenses, and reduce overall IT-staff head count. That can lead to significant financial savings."

Costs for managed WAN-optimisation services vary by provider. In general, a carrier will price its service based on the types of applications, the number of users accessing them, the speed and quality of the physical line being optimised for them, and the number of remote sites being optimised.

As with any managed service, in the end the benefits match the costs: With faster physical networks, optimisation becomes more complex and cost prohibitive. Sevcik advises companies to do the hard work of determining how optimisation fits their changing needs and processes, then weighing the benefits of outsourcing bandwidth optimisation.